☒ ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For
the fiscal year ended June 30, 2018

or

☐ TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For
the transition period from _________ to _____________

Commission
file number: 001-34260

CHINA
GREEN AGRICULTURE, INC.

(Exact
name of registrant as specified in its charter)

Nevada

36-3526027

(State
or other jurisdiction of
incorporation or organization)

(I.R.S.
Employer
Identification No.)

Third
floor, Borough A, Block A. No. 181, South Taibai Road

Xi’an,
Shaanxi Province, PRC 710065

(Address
of principal executive offices) (Zip Code)

Registrant’s
telephone number: +86-29-88266368

Securities
registered pursuant to Section 12(b) of the Act:

Title
of each class

Name
of each exchange on which registered

Common
Stock, $0.001 Par Value Per Share

NYSE

Securities
registered pursuant to Section 12(g) of the Act: None.

Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
No ☒

Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes
☐ No ☒

Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such report(s)),
and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No
☐

Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K. ☐

Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large
accelerated filer ☐

Accelerated
filer ☐

Non-accelerated
filer ☐

Smaller
reporting company ☒

Do
not check if a smaller reporting company

Emerging
growth company ☐

If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐

Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
☒

The
aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at
which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of
the registrant’s most recently completed second fiscal quarter: $32,058,697 as of December 29, 2017, based on the closing
price $1.24 of the Company’s common stock on such date.

The number of outstanding
shares of the registrant’s common stock on October 19, 2018, was 38,896,945.

China
Green Agriculture, Inc. (‘we” or “the Company”) is primarily engaged in the research, development, production
and sale of various types of fertilizers and agricultural products in the People’s Republic of China (“PRC”)
through its wholly-owned Chinese subsidiaries, Jinong Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd. (“Jinong”),
and Beijing Gufeng Chemical Products Co., Ltd., (“Gufeng”), both of which are engaged in fertilizer production. In
addition, we operate through variable interest entities (the “VIEs”), including Xi’an Hu County Yuxing Agriculture
Technology Development Co., Ltd. (“Yuxing”), engaged in agricultural products production, and another eight VIE companies
that we acquired since June 2016. Our primary business is fertilizer products, specifically humic acid-based compound fertilizer
produced through Jinong; and compound fertilizer, blended fertilizer, organic compound fertilizer, slow-release fertilizers, highly-concentrated
water-soluble fertilizers and mixed organic-inorganic compound fertilizer produced through Gufeng. In addition, through Yuxing,
we develop and produce agricultural products, such as top-grade fruits, vegetables, flowers and colored seedlings.

Since
June 2016, the Company, through its wholly-owned subsidiary Jinong, entered into strategic acquisition agreements and a series
of contractual agreements with the shareholders of the following eight companies that are organized under the laws of the PRC
and are deemed as VIEs: Shaanxi Lishijie Agrochemical Co., Ltd., Songyuan Jinyangguang Sannong Service Co., Ltd., Shenqiu County
Zhenbai Agriculture Co., Ltd., Weinan City Linwei District Wangtian Agricultural Materials Co., Ltd., Aksu Xindeguo Agricultural
Materials Co., Ltd., and Xinjiang Xinyulei Eco-agriculture Science and Technology Co., Ltd., Sunwu County Xiangrong Agricultural
Materials Co., Ltd., and Anhui Fengnong Seed Co., Ltd. (collectively hereafter referred to as “the VIE Companies.”)

Fertilizer
production is our core business and we generated approximately $210,706,415, $211,088,271, and $260,378,357, or 73.1%, 74.1%,
and 96.9% of our total revenues for the years ended June 30, 2018, 2017 and 2016, respectively. Our total annual production capacity
was 555,000 metric tons as of June 30, 2018.

As
of June 30, 2018, we sold our products through a network of 1,959 regional distributors covering 22 provinces, 4 autonomous regions
and 4 central government-controlled municipalities in China. We do not rely on any single distributor. Our top five distributors
accounted for approximately 35.6% of our fertilizer revenues for the fiscal year ended June 30, 2018.

As
of June 30, 2018, we have developed 726 different fertilizer products. We conduct our research and development activities through
Yuxing, one of Jinong’s VIEs, which tests new fertilizers and grows high quality flowers, vegetables and seedlings for commercial
sales.

During the fiscal years ended June 30, 2018, 2017, and 2016, our revenues were $287,053,530, $277,848,486,
and $268,785,020, respectively; our net income (loss) for these periods was $(6,931,225), $25,152,154, and $24,704,193, respectively.

1

Recent
Developments

Strategic
Acquisitions:

On
June 30, 2016 and January 1, 2017, through Jinong, we entered into (i) Strategic Acquisition Agreements (the “SAA”),
and (ii) Agreements for Convertible Notes (the “ACN”), with the shareholders of the companies as identified below
(the “Targets”).

The exchange rate
between RMB and U.S. dollars on June 30, 2016 was RMB1=US$0.1508, according to the exchange rate published by Bank of
China.

(2)

On November 30, 2017, the Company, through its wholly-owned subsidiary Jinong, discontinued the strategic acquisition agreements and the series of contractual agreements with the shareholders of Zhenbai. In return, the shareholders of Zhenbai agreed to tender the whole payment consideration in the SAA back to the Company with early termination penalties. The convertible notes paid to Zhenbai’s shareholders and the accrued interest has been forfeited.

The
exchange rate between RMB and U.S. dollars on January 1, 2017 was RMB1=US$0.144, according to the exchange rate published by Bank
of China.

Pursuant
to the SAA and the ACN, the shareholders of the Targets, while retaining possession of the equity interests and continuing to
be the legal owners of such interests, agreed to pledge and entrust all of their equity interests, including the proceeds thereof
(but excluding any claims or encumbrances), and the operations and management of its business to Jinong, in exchange for an aggregate
amount of RMB45,000,000 (approximately $6,731,600), to be paid by Jinong within three days following the execution of the SAA,
ACN and the VIE Agreements, and convertible notes with an aggregate face value of RMB63,000,000 (approximately $9,418,800), with
an annual fixed compound interest rate of 3% and a term of three years.

The
SAA contains representations and warranties by both Jinong and the shareholders of the Targets, including:

Should
the shareholders of the Targets fail to satisfy the conditions listed in the exhibit to the SAA, i.e., the entry into the VIE
Agreements, or breach of any the representations or warranties in the SAA, other than the direct and consequential damages that
may cause to Jinong, they are to pay RMB100,000 (approximately $15,080) as liquidated damages.

The
shareholders of the Targets also agreed to ensure that its management and principal technology employees enter into noncompetition
agreements prohibiting them from any direct or indirect operation or ownership of any business that is in competition with the
Targets.

The
shareholders of the Targets also represented that there are no claims or encumbrances against their interests, as defined in the
SAA, and that there are no actions or other legal proceedings pending against the Targets that would have a material adverse effect
on the Target’s capacity to fulfill their contractual obligations. The Targets are to have a minimum of 10% annual compound
growth rate (the “Growth Rate”) within the three years after the closing of the acquisitions (the “Closing”).

Pursuant
to the SAA, all the existing employees continue to be the employees of the Targets after the Closing based on their current employment
terms, subject to the decisions of the new Boards of Directors of the Targets to be formed after the Closing.

Under
the agreements relating to the convertible notes, each convertible note has a face value of RMB100, with a term of three years
and an annual fixed compound interest rate of 3%. The convertible notes take priority over the preferred stock and common stock
of Jinong, and any other class or series of capital stock Jinong issues in the future, in terms of interest and payments in the
event of any liquidation, dissolution or winding up of Jinong. On or after the third anniversary of the issuance date of each
note (the “Maturity Date”), noteholders may convert the notes into Common Stock of the Company. The noteholders may
not convert the notes prior to the Maturity Date. If a note is converted into the Company’s common stock, the noteholder
will become a holder of the Company’s common stock.

The
per share conversion price of the notes is the greater of the following: (i) $5.00 per share or (ii) 75% of the closing price
of the Company’s common stock on the date the noteholder delivers the conversion notice.

If
the profits of the Targets hit certain levels of sales set by the parties, i.e., the Growth Rate, Jinong may, at its discretion,
convert the notes to (i) cash, (ii) the Company’s common stock, or (iii) to a combination of cash and the Company’s
common stock, in the amount of the face value of the notes with compound interest for three years.

Upon
the Maturity Date of the note, the noteholder can (i) request Jinong to convert all or a part of the note; (ii) continue to hold
the note until the holder elects to deliver a conversion request; however, if the holder chooses to hold the note after the Maturity
Date, no interest accrues on the note after the three-year term.

3

In
the event that the actions of the Targets or noteholders materially impair Jinong or if any of the Targets fail to achieve the
Growth Rate, Jinong may request noteholders to redeem the shares they hold of the Targets for (i) an amount represented by the
convertible notes including the accrued interest and the cash payment Jinong made on the Closing of the acquisition and (ii) 15%
of the amount under (i) mentioned immediately prior to this item. However, the noteholder can elect to offset the payment of the
interest of the note by the annual increase rate the Targets realizes, despite a lower rate.

VIE
Structure with the Targets

Jinong,
the Targets, and the shareholders of the Targets also entered into a series of contractual agreements for the Targets to qualify
as variable interest entities or VIEs (the “VIE Agreements”). The VIE Agreements can be summarized as follows:

Entrusted
Management Agreements

Pursuant
to the terms of certain Entrusted Management Agreements dated June 30, 2016 and January 1, 2017, between Jinong and the shareholders
of the sales VIE Companies (the “Entrusted Management Agreements”), the sales VIE Companies and their shareholders
agreed to entrust the operations and management of its business to Jinong. According to the Entrusted Management Agreement, Jinong
possesses the full and exclusive right to manage the sales VIE Companies’ operations, assets and personnel, has the right
to control all the sales VIE Companies’ cash flows through an entrusted bank account, is entitled to the sales VIE Companies’
net profits as a management fee, is obligated to pay all the sales VIE Companies’ payables and loan payments, and bears
all losses of the sales VIE Companies. The Entrusted Management Agreements will remain in effect until (i) the parties mutually
agree to terminate the agreement; (ii) the dissolution of the sales VIE Companies; or (iii) Jinong acquires all the assets or
equity of the sales VIE Companies (as more fully described below under “Exclusive Option Agreements”).

Exclusive
Technology Supply Agreements

Pursuant
to the terms of certain Exclusive Technology Supply Agreements dated June 30, 2016 and January 1, 2017, between Jinong and the
sales VIE companies (the “Exclusive Technology Supply Agreements”), Jinong is the exclusive technology provider to
the sales VIE companies. The sales VIE companies agreed to pay Jinong all fees payable for technology supply prior to making any
payments under the Entrusted Management Agreement. The Exclusive Technology Supply Agreements shall remain in effect until (i)
the parties mutually agree to terminate the agreement; (ii) the dissolution of the sales VIE companies; or (iii) Jinong acquires
the sales VIE companies (as more fully described below under “Exclusive Option Agreements”).

Shareholder’s
Voting Proxy Agreements

Pursuant
to the terms of certain Shareholder’s Voting Proxy Agreements dated June 30, 2016 and January 1, 2017, among Jinong and
the shareholders of the sales VIE companies (the “Shareholder’s Voting Proxy Agreements”), the shareholders
of the sales VIE companies irrevocably appointed Jinong as their proxy to exercise on such shareholders’ behalf all of their
voting rights as shareholders pursuant to PRC law and the Articles of Association of the sales VIE companies, including the appointment
and election of directors of the sales VIE companies. Jinong agreed that it shall maintain a board of directors, the composition
and appointment of which shall be approved by the Board of the Company. The Shareholder’s Voting Proxy Agreements will remain
in effect until Jinong acquires all the assets or equity of the sales VIE companies.

Exclusive
Option Agreements

Pursuant
to the terms of certain Exclusive Option Agreements dated June 30, 2016 and January 1, 2017, among Jinong, the sales VIE companies,
and the shareholders of the sales VIE companies (the “Exclusive Option Agreements”), the shareholders of the sales
VIE companies granted Jinong an irrevocable and exclusive purchase option (the “Option”) to acquire the sales VIE
companies’ equity interests and/or remaining assets, but only to the extent that the acquisition does not violate limitations
imposed by PRC law on such transactions. The Option is exercisable at any time at Jinong’s discretion so long as such exercise
and subsequent acquisition of the sales VIE companies does not violate PRC law. The consideration for the exercise of the Option
is to be determined by the parties and memorialized in the future by definitive agreements setting forth the kind and value of
such consideration. Jinong may transfer all rights and obligations under the Exclusive Option Agreements to any third parties
without the approval of the shareholders of the sales VIE companies so long as a written notice is provided. The Exclusive Option
Agreements may be terminated by mutual agreements or by 30 days written notice by Jinong.

4

Equity
Pledge Agreements

Pursuant
to the terms of certain Equity Pledge Agreements dated June 30, 2016 and January 1, 2017, among Jinong and the shareholders of
the sales VIE companies (the “Pledge Agreements”), the shareholders of the sales VIE companies pledged all of their
equity interests in the sales VIE companies to Jinong, including the proceeds thereof, to guarantee all of Jinong’s rights
and benefits under the Entrusted Management Agreements, the Exclusive Technology Supply Agreements, the Shareholder’ Voting
Proxy Agreements and the Exclusive Option Agreements. Prior to termination of the Pledge Agreements, the pledged equity interests
cannot be transferred without Jinong’s prior written consent. The Pledge Agreements may be terminated only upon the written
agreement of the parties.

Non-Compete
Agreements

Pursuant
to the terms of certain Non-Compete Agreements dated June 30, 2016 and January 1, 2017, among Jinong and the shareholders of the
Targets (the “Non-Compete Agreements”), the shareholders of the Targets agreed that during the period beginning on
the initial date of their services with Jinong, and ending five (5) years after termination of their services with Jinong, without
Jinong’s prior written consent, they will not provide services or accept positions (including partners, directors, shareholders,
managers, proxies or consultants) with by any profit making organizations with businesses that may compete with Jinong. They will
not solicit or interfere with any of Jinong’s customers, or solicit, induce, recruit or encourage any person engaged or
employed by Jinong to terminate his or her service or engagement.

Jinong
acquired the Targets using the VIE arrangement based on our need to further develop our business and comply with the regulatory
requirements under the PRC laws.

As
our business focuses on the production of fertilizer, all our business activities intertwine with those in the agriculture industry
in China. Specifically, we deal with compliance, regulation, safety, inspection, and licenses in fertilizer production, farm land
use and transfer, growing and distribution of agriculture goods, agriculture basic supplies, seeds, pesticides, and trades of
grains. It is an industry in which stringent regulations are implemented and strictly enforced. In addition, e-commerce, which
is also under strict government regulations in the PRC, has lately become a sale and distribution channel for agricultural products.
Currently, we are developing an online platform to connect the physical distribution network we either own or lease.

Compared
with the regulatory environment in other jurisdictions, the regulatory environment in the PRC is unique. For example, On August
8, 2006, six PRC regulatory agencies promulgated the Regulation on Merger and Acquisition of Domestic Companies by Foreign Investors
(the “M&A Rules”), which became effective on September 8, 2006. The M&A Rules require that an offshore special
purpose vehicle controlled directly or indirectly by PRC companies or individuals and formed for purposes of overseas listing
through acquisition of PRC domestic interests held by such PRC companies or individuals obtain the approval of the China Securities
Regulatory Commission (the “CSRC”) prior to the listing and trading of such special purpose vehicle’s securities
on an overseas stock exchange. On September 21, 2006, the CSRC published procedures regarding its approval of overseas listings
by special purpose vehicles.

For
both e-commerce and agriculture industries, PRC regulators limit the investment from foreign entities and set particular rules
for foreign-owned entities to conduct business. We expect these limitations on foreign-owned entities will continue to exist in
e-commerce and agriculture industries. VIE arrangements, however, provide feasibility for obtaining administrative approval process
and avoiding industry restrictions that may be imposed on an entity that is a wholly-owned subsidiary of a foreign entity. The
VIE agreements reduce uncertainty and the current limitation risk. It is our understanding that the VIE agreements, as well as
the control we obtained through VIE arrangement, are valid and enforceable. We believe that this legal structure does not violate
the known, published, and current PRC laws. While there are substantial uncertainties regarding the interpretation and application
of PRC Laws and future PRC laws and regulations, and there can be no assurance that the PRC authorities will take a view that
is not contrary to or otherwise different from our belief and understanding stated above, we believe the substantial difficulty
that we experienced previously to conduct business in agriculture as a foreign ownership company can be greatly reduced by the
VIE arrangement. Further, as an integral part of the VIE arrangement, the underlying equity pledge agreements provide legal protection
for the control we obtained. Pursuant to the equity pledge agreements, we have completed the equity pledge processes with the
Targets to ensure the complete control of the interests in the Targets. The shareholders of the Targets are not entitled to transfer
any shares to the third party under the exclusive option agreements. If necessary, they may transfer shares to us without consideration.

5

While
the VIE arrangement provides us with the feasibility to conduct our business in the e-commerce and agriculture industries, validity
and enforceability of VIE arrangement is subject to (i) any applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or similar laws affecting creditors’ rights generally, (ii) possible judicial or administrative actions or any
PRC Laws affecting creditors’ rights, (iii) certain equitable, legal or statutory principles affecting the validity and
enforceability of contractual rights generally under concepts of public interest, interests of the State, national security, reasonableness,
good faith and fair dealing, and applicable statutes of limitation; (iv) any circumstance in connection with formulation, execution
or implementation of any legal documents that would be deemed materially mistaken, clearly unconscionable, fraudulent, coercive
at the conclusions thereof; and (v) judicial discretion with respect to the availability of indemnifications, remedies or defenses,
the calculation of damages, the entitlement to attorney’s fees and other costs, and the waiver of immunity from jurisdiction
of any court or from legal process. Validity and enforceability of VIE arrangements is also subject to risk derived from the discretion
of any competent PRC legislative, administrative or judicial bodies in exercising their authority in the PRC. As a result, there
can no assurance that any of such PRC Laws will not be changed, amended or replaced in the immediate future or in the longer term
with or without retrospective effect.

Our
History

The
Company was incorporated under the laws of the state of Kansas on February 6, 1987 under the name Videophone, Inc. The Company
had no operations from December 1996 to December 2007. In October 2007, the Company was reincorporated in the state of Nevada.
On December 26, 2007, the Company acquired all the issued and outstanding capital stock of Green New Jersey, through a share exchange
(the “Share Exchange”). Because of the Share Exchange, the Company owns 100% of Green New Jersey. The Share Exchange
occurred simultaneously with a private placement of $20,519,255 on December 26, 2007.

Green
New Jersey was incorporated on January 27, 2007 under the laws of the State of New Jersey. On August 24, 2007, Green New Jersey
acquired 100% of the outstanding shares of Jinong, a company incorporated in the PRC on June 19, 2000.

After
the acquisition of Green New Jersey, the Company changed its name to China Green Agriculture, Inc., effective on February 5, 2008.

On
July 23, 2009, Yuxing became a direct, wholly-owned subsidiary of Jinong to facilitate the research and development of agricultural
products and fertilizers. Effective June 16, 2013, Yuxing was converted into a PRC domestic enterprise wholly owned by an individual
who entered into a series of contractual agreements with Jinong pursuant to which Yuxing became Jinong’s variable interest
entity, or VIE.

On
March 9, 2009, the Company’s common stock was listed on the NYSE MKT, formerly known as NYSE Amex Equities under the trading
symbol “CGA”. On December 4, 2009, the Company voluntarily ceased trading its common stock on the NYSE Amex Equities
and transferred its listing to the New York Stock Exchange on December 7, 2009. The Company’s ticker symbol remains “CGA”.

On
July 2, 2010, the Company, through Jinong, consummated a transaction to acquire all equity interests of Gufeng and its subsidiary
Tianjuyuan. As a result, Gufeng and Tianjuyuan became wholly-owned subsidiaries of Jinong and indirect subsidiaries of the Company.

On
June 30, 2016, the Company, through its wholly-owned subsidiary Jinong, entered into strategic acquisition agreements and a series
of contractual agreements with the shareholders of the following six companies that are organized under the laws of the PRC and
would be deemed as our VIEs: Shaanxi Lishijie Agrochemical Co., Ltd., Songyuan Jinyangguang Sannong Service Co., Ltd., Shenqiu
County Zhenbai Agriculture Co., Ltd., Weinan City Linwei District Wangtian Agricultural Materials Co., Ltd., Aksu Xindeguo Agricultural
Materials Co., Ltd., and Xinjiang Xinyulei Eco-agriculture Science and Technology Co., Ltd.

On
January 1, 2017, the Company, through its wholly-owned subsidiary Jinong, entered into strategic acquisition agreements and a
series of contractual agreements with the shareholders of the following two companies that are organized under the laws of the
PRC and would be deemed as our VIEs: Sunwu County Xiangrong Agricultural Materials Co., Ltd. and Anhui
Fengnong Seed Co., Ltd.

On
November 30, 2017, the Company, through its wholly-owned subsidiary Jinong, discontinued the strategic acquisition agreements
and the series of contractual agreements with the shareholders of Zhenbai.

Our
principal executive offices are located at 3rd Floor, Borough A, Block A. No. 181, South Taibai Road, Xi’an,
Shaanxi Province, People’s Republic of China 710065 and our telephone number is +86-29-88266368. Our website address is
www.cgagri.com. The Company routinely posts important information on its website.

6

Our
current corporate structure is set forth in the following diagram:

Yuxing,
Lishijie, Jinyangguang, Wangtian, Xindeguo, Xinyulei, Xiangrong and Fengnong may also collectively be referred to as “the
VIE Companies”; Lishijie, Jinyangguang, Wangtian, Xindeguo, Xinyulei, Xiangrong and Fengnong may also collectively be referred
to as the “sales VIEs”

7

Industry
Analysis

Fertilizer
Market in China

Influenced
by the sluggish demand in domestic and international fertilizer markets, China’s fertilizer market is in a downturn during
this fiscal year. In terms of production, the growth of fertilizer output remained limited during the fiscal year. Meanwhile,
large inventories of fertilizer placed downward pressure on prices. Market prices of the raw material were volatile; the price
of fertilizer is uncertain and can be hard to increase. In terms of domestic consumption, though grain prices increased to some
extent, the domestic consumption capacity is limited; as for export, international markets are depressed continuously, resulting
from the declines in export prices. During this fiscal year, the fertilizer industry was in a downward trend as profits are compressed
again and the losses of enterprises are enlarged. Under the pressure of sluggish growth in the fertilizer market, industrial restructuring,
merger and reorganization activity in the industry increased, reducing the number of enterprises in the market. At the same time,
the production equipment and technological level was largely improved: coal-water slurry gasification technology, powdered coal
pressure gasification technology, large sulfur-based compound fertilizer technology and beneficiation technology of mid-low-grade
phosphate were widely used, while new fertilizer products such as slow controlled release fertilizer and microbial fertilizer
have been rapidly developed and resulted in significant market expansion. In the last few years, as the growth of China’s
economy has gradually slowed down and the risk of economic downturn therefore exists, the government has adopted various measures
to maintain the growth and the Company needs structural adjustment and growth pattern transformation.

On
the one hand, government’s support to agricultural production includes intensive agricultural investment, subsidies and
minimum purchasing price increases for farm products. China has seen another bumper year of grain production which added fertilizer
consumption scale to remain highly uncertain. The country has achieved consecutive years of rising grain harvests since the founding
of the People’s Republic of China in 1949. As the concentration of fertilizer industry is steadily improving, the influence
on market from key enterprises have increased, which appeared to help to ease the weakened market volatility. On the other hand,
the current oversupply problem is difficult to relieve. Mechanisms of price reform for raw materials (such as coal, natural gas,
sulfur phosphate ore, etc.) are accelerating, which caused pressure on production costs. A stricter export tariff policy is expected
to last for long, and the external economic situation may limit the operation and expansion of fertilizer enterprises in international
markets.

The
interaction of the above factors complicated the situation in fertilizer markets in 2017 and 2018.The overall growth rate of this
industry has continually slowed down and the market has fluctuated violently. The transformation for China’s fertilizer
industry from quantitative growth pattern to qualitative growth pattern is irreversible. The centralization of production, high-end
oriented product, service-oriented marketing and market-oriented raw materials dominated the developments in fertilizer market.

Additionally,
government support for the agriculture industry in China can act as an additional boost to the fertilizer industry in China. However,
we anticipate organic fertilizers will become an emerging segment in the coming years given the additional subsidies for farming,
elimination of certain land taxes, land reform initiatives to be implemented by the PRC government to promote the growing of organic
produce. We believe the demand for fertilizer will continue to grow because of increase in food demand, decrease in arable land
and reduction of crop yields. The demand for fertilizers nationwide is continuously expected to increase by millions of tons of
nutrient, with an expected compound annual growth rate of 7.7% between 2016-2022.

Organic
versus Chemical Fertilizers

In
general, fertilizer products are categorized into organic and chemical fertilizers. Organic fertilizers can be natural or developed
artificially. Natural organic fertilizers include manure, slurry, worm castings, peat, seaweed, humic acid, brassin and guano.
Artificial organic fertilizers include compost, blood meal, bone meal, humic acid, and are typically supplemented with other nutrient
ingredients. Chemical fertilizers normally are composed of synthetic chemicals such as phosphate and potassium compounds. The
primary difference between organic fertilizers and chemical fertilizers is in the sourcing process of ingredients, as the nutrient
contents are largely the same.

Over
the past 20 years, the use of chemical fertilizers in China substantially increased, but years of use created unintended consequences
for the agriculture industry—agricultural products gradually lack certain minerals, since chemical fertilizers applied fell
short of natural minerals which made soil infertile.

In
addition, heavy use of chemical fertilizers can create “fertilizer burn”, the over-fertilization of a single nutrient
such as nitrogen, which can dry roots and suspend crop growth due to the upset of balance in compound salts and soil acidification.
Another drawback caused by chemical fertilizers is that soil is easily depleted by irrigation, rainfall and flooding. In addition,
the production of chemical fertilizers consumes a great deal of natural resources. For example, the production of synthetic ammonia,
a common chemical fertilizer, consumes about 5% of the world’s natural gas consumption.

Organic
fertilizers, on the other hand, improve the biodiversity and long-term productivity of soil. Organic nutrients increase the abundance
of soil organisms by providing organic micronutrients. Unlike chemical fertilizers, organic fertilizer nutrients are diluted with
better solubility. It requires less application on soil to reach the same result as of chemical fertilizers, which maintains soil
fertility and avoid the runoff caused by components like soluble nitrogen and phosphorus. However, the composition of organic
fertilizer is more complex and costly than chemical products. As an alternative to pure chemical fertilizer use, farmers can also
use inorganic fertilizer supplemented with small portion of organic fertilizers.

8

Since
the 1980s, China has intensified the use of chemical fertilizers to increase crop yields. While the increase in crop yield slowed
down in recent years, the overuse of chemical fertilizers also caused many environmental issues ranging from water pollution to
soil damage. As a result, the PRC government has been promoting the use of environmental friendly green fertilizers, such as humic
acid-based organic compound fertilizers and mixed organic-inorganic compound fertilizers, because they provide crops with incremental
yield by adding various nutrients essential to soil. Although being relatively new to farmers, the demand for these green fertilizers
is increasing and we expect this trend to continue in the coming years. Although we expanded business among other Asian and Southeast
Asian countries, the PRC remained our principal market for organic compound fertilizers and related agricultural products.

The
“Green Food” Industry in the PRC

The
rise of the PRC industry for food free from pollutants or harmful chemicals, or “green food,” raises the demand for
organic fertilizers. “Green Food”, the certificate for agricultural products promoted by Chinese Government, positioned
between ordinary agricultural food from common farming practice and the organic food has two levels: “AA Green Food”
and “A Green Food”. The “AA Green Food” standard indicates or equals to that of organic agriculture. Since
the market for organic agricultural products in China has huge potential, it is forecasted that the increase of organic agricultural
products consumption in China will exceed that of the average organic agricultural products consumption in the world in the next
few years, and the market of Chinese organic agricultural products reached USD 5 billion in 2015, with an incremental 20 percent
increase year over year during the following years.

With
the rapid development of the organic food industry in China, an increasing number of companies have been entering into the green
food sector to utilize market opportunities. In 1990, the PRC Ministry of Agriculture began to promote the production of green
food. In 1992, the PRC Ministry of Agriculture established the China Green Food Development Center (CGFDC) to supervise the development
and management of green food at the national and provincial levels in the PRC. In 1993, the PRC Ministry of Agriculture established
regulations for green food labeling; in 1996, a trademark for green food was registered and put into use in the PRC.

Crops
grown with the use of our products are qualified for the “AA Green Food” certificate. As mentioned above, the “AA”
rating indicates that the crops contain minimal chemical residue from fertilizers. Although our products are not qualified for
the “AA Green Food” certificate, they are (except for the products from Gufeng) certified as “Green Food Production
Material” by the CGFDC.

According
to the statistics from the CGFDC, China’s annual output of green food reached 15 million tons in 2008. However, the domestic consumption
level remains relatively low, comprising approximately 3% of the market share of food commodities. The low consumption level is
primarily due to: (i) small scale of production of green food; (ii) lack of consumer awareness of green food and (iii) the presence
of counterfeit green food products that adversely affect consumers’ purchase.

As
described by the CGFDC, the development strategy for China’s green food industry are as follows: first, maintain high quality
standards and focus on developing key products; second, promote and facilitate the industrialization of green food; third, implement
an integrated development strategy emphasizing producers, production base and farmers; fourth, accelerate the pace of development
with the aid of the government; and fifth, to carry out an international development strategy aimed at promoting exports.

According
to the Investment and Forecast Report on China Green Food Industry 2012-2016 by Research in China, a Chinese market research company,
the green food industry is a high growth industry with significant investment potential. According to the report, leading green
food producers will experience huge growth when they achieve national and provincial agricultural industrialization with the supports
of favorable government policies and tax breaks.

Growth
Strategy

We
believe that our increased production capacity, our research and development capability, along with the new sales segment positioned
us to benefit from the anticipated growth of the PRC fertilizer market. We expect to expand sales and grow revenues through the
following strategies:

☐ Expand Capacity and Diversify Product Offerings. Our current annual fertilizer production capacity is 555,000 metric tons
and our production portfolio of fertilizers includes 475 products. In the future, we will expand our existing production
lines, develop new products and acquire certain PRC fertilizer manufacturers that complement our product lines.

9

☐ Capitalize
on Synergies Created by Research and Development Efforts. Regarding the construction of Yuxing’s research and development
center, we have established 98 sunlight greenhouses and six “intelligent” greenhouses. We expect the Yuxing facility
to help us shorten the fertilizer market cycle by providing an advanced testing field for new products which are manufactured
by Jinong. In addition, by making efforts in research and development, we expect to simultaneously facilitate the production of
superior agricultural products, such as flower bulbs, flowers, fruits and vegetables, which would eventually increase revenues.

☐Develop
new advanced high efficient fertilizers. The new fertilizer products represented by slow controlled-release fertilizer, microbial
fertilizer and others, are developed rapidly with high market expansion. Gufeng has signed a cooperation agreement with Anhui
Diyuan Biological Technology Co., LTD (“Anhui Diyuan”) to produce the “Tianjuyuan” controlled-release
fertilizer. The objective is to provide Gufeng with fertilizer agent supplied by Anhui Diyuan to improve the control release effectiveness
when producing controlled-release compound fertilizers. In the agreement, Chinese Academy of Sciences (“CAS”) and
Anhui Diyuan authorized Gufeng to refer to CAS and Anhui Diyuan’s name in marketing related fertilizer products. We expect
that Gufeng’s controlled-release compound fertilizer will stay an advantageous position in the market.

☐Develop
proprietary sales segment. Our business started and was rooted in fertilizer production. Since 2016, we added a new business
segment, the sales of fertilizer and other agriculture material products, to the existing manufacturing segments. We believe adding
this sales segment will be beneficial to our manufacturing segments: this sales segment can provide supplemental revenue and earnings
by covering more market areas, and selling more products not only produced by ourselves but also by other manufacturers. In the
downstream of fertilizer value lines, a sales segment can offset the impact on profitability when the demand for our produced
fertilizer is softened; it also can mitigate the counterparty risk for manufacturers when the creditworthiness of a manufacturer’s
distributor is weakened. Thus, a sales segment is a natural hedge to manufacturing segments, as it improves product portfolio,
customer base, and capital structure. We had been developing the sales segment mainly by acquiring the control of eight established
VIE sales ventures to build this new segment rapidly.

Products

Our
principal products are our own fertilizers, which consist of liquid, granular and powdered fertilizers and various kinds of compound
fertilizers developed to increase crop yields. We can manufacture 475 fertilizer products from humic acid-based fertilizers to
compound fertilizers. In Yuxing, we produce high quality agricultural products such as fruits, vegetables and flowers for commercial
sale. In sales segment, we sell various products such as fertilizers, pesticides, and seeds. These products are either manufactured
by ourselves or by other manufacturers.

Fertilizer
Products

Fertilizer
manufacturing is our core business, which accounts for approximately 73.1% of total revenues. The self-manufactured fertilizers
are produced and sale through Jinong, Gufeng, and sales VIEs. We believe that Jinong utilizes one of the most advanced automated
humic acid production lines in China. Humic acid is a complex with natural, organic ingredient essential to make soil fertile.
Humic acid-rich material, such as peat, lignite or weathered coal generating naturally from decomposed plant or animal remains,
is one of the major organic constituents for soil composition. Humic acid exhibits a high capacity for cation exchange (a chemical
process in which cations of like charge are exchanged equally between a solid and a solution), which serves to chelate plant nutrient
elements and release them as the plant requires. The chelation process prevents leaching of nutrients by holding them in the soil
solution. Moreover, humic acids can bind soil toxins along with plant nutrients, thereby strongly stabilize soil. The regular
use of humic acid organic liquid compound fertilizer can effectively reduce the use of chemical fertilizer, insecticide, herbicide
and water. This mechanism contributes to environmental protection by preventing contamination of water sources caused by runoff.

In
nature, humic acid improves soil structure and aeration, nutrient absorption and water retention. It also increases soil’s
buffering capacity against fluctuations in PH levels, and reduces soil crusting and erosion from wind and water as well as radical
toxic pollutants. Humic acid promotes the developing of root systems, seed germination and overall plant growth. It also enhances
health, resilience and overall appearance of plants. We believe there is no synthetic material currently known to match humic
acid’s effectiveness and versatility.

The
pure humic acid used in our fertilizers is distilled and extracted from weathered coal by way of alkaline digestion and acid recrystallization.
Our Jinong fertilizers are principally used as a foliar fertilizer (a liquid, water soluble fertilizer applied to a plant’s
foliage by a fine spray so the plant absorbs the nutrients through its leaves), through spraying directly on soil or injecting
into the irrigation systems. Benefits of using our products are to stimulate the growth and yield of plants, protecting them from
drought, disease and temperature damages while improving soil structure and fertility.

We
have a multi-tiered product line of 475 fertilizer products, covering humic acid-based compound fertilizer produced through Jinong,
and organic/inorganic compound fertilizer through Gufeng.

During
the fiscal years ended June 30, 2018, 2017, and 2016, we recorded $210,706,415, $211,088,271, and $260,378,357, respectively,
in gross revenues from sales of our fertilizer products, representing 73.1%, 74.1%, and 96.9% of our total revenues for such periods.
Gufeng and Tianjuyuan manufacture a total of 333 fertilizer products. 51.6% of Gufeng’s fertilizer revenue came from humic
acid compound fertilizers and 48.4% from compound fertilizer for the fiscal year ended June 30, 2018.

Agricultural
Products

Our
subsidiary, Yuxing, one of Jinong’s VIEs, produces top-grade fruits, vegetables, flowers and colored seedlings for commercial
sale. The gross revenues from the sale of our agricultural products for the fiscal years ended June 30, 2018, 2017 and 2016, were
$10,485,030, $8,517,231, and $8,406,663, respectively, representing 3.6%, 3.0%, and 1.6% of our total revenues, respectively.

Yuxing
was originally established to be the research and development base for humic acid fertilizers produced by Jinong. By simulating
the growing conditions and cycles of various plants, such as flowers, vegetables and seedlings, Yuxing regularly conducts experimental
testing to enhance the efficacy of our new fertilizers.

Sales
Products

Our
sales segment, consisting of eight sales VIEs we acquired control of since 2016, procure various agriculture materials that farmers
need, such as, fertilizers, pesticides, seeds, mulches, and soil conditioners etc., from different manufacturers and wholesalers.
In turn, they sell these materials to their customers: farmers, distributors, and other parties. The gross revenues from the sales
segment for the fiscal years ended June 30, 2018 were $66,866,254, representing 23.2% of our total revenues.

Fertilizer
Manufacturing Process

Our
production lines employ scientifically-designed production procedures and strict quality control systems to ensure high quality
in our products. These production lines are fully automated and ran by a central control system with minimal manual input by technicians.
The machinery and vats for the line are supplied by a local medical machinery manufacturer and the automatic control systems were
developed by us. Our access management system protects the proprietary ingredient mixes from any unauthorized use at all time.
Our computer server is connected to the electronic scales on each of the material input bins to ensure that the exact quantity
of each elements or ingredients is delivered correctly, thus maintain product quality and reduce waste. Our production line producing
liquid fertilizer and powered fertilizer is centrally controlled by a wireless panoramic audio and video monitoring system that
allows connectivity with mobile terminals such as cell phones.

In
Jinong, we operate 6,495 square meters (69,911 square feet) production facility that manufactures liquid fertilizer products and
a 13,803-square meter (148,576 square feet) production facility that produces liquid and highly concentrated (powdered) fertilizers.
Jinong’s total annual production capacity of these facilities is 55,000 metric tons.

In
Gufeng and Tianjuyuan, we operate eight manufacturing facilities located in No. 6 Mafang Logistics Park, Pinggu, Beijing. These
facilities produce various kinds of fertilizers and have a total annual production capacity of 500,000 metric tons.

The
manufacturing techniques utilized by Gufeng include extruder granulation, rotary drum steam granulation, urea-based spraying granulation
and resin-coated sustained release, which enable Gufeng to effectively meet the production requirements of all different compound
fertilizers. To ensure high quality, Gufeng and Tianjuyuan employ strict quality controls from the raw materials purchases to
the products sales to end users.

We
produced and sold a total of approximately 355,584 metric tons of fertilizer products during the fiscal year ended June 30, 2018.

11

Raw
Materials and Suppliers

Fertilizer
Products

Among
the three materials utilized to produce humic acid (weathered coal, lignite and peat), we have chosen weathered coal as a key
raw material because it is abundant and economical for production. We have been sourcing the humic acid from different regions
including Shaanxi and Shanxi provinces, and Inner Mongolia Autonomous Region.

In
addition to weathered coal, we also use approximately 50 different components in our production process, including elements such
as sodium, calcium, zinc, iron and potassium, all of which can be readily obtained from local markets. We utilize spectral analysis
technology to select raw materials with the best quality, and we have specially-trained buyers to ensure the consistency of raw
materials procured.

The
fertilizer products that Gufeng and Tianjuyuan manufacture incorporate over 50 different raw materials, including coal, sulfuric
acid and NPK (nitrogen, phosphorus and potassium) related compounds such as amide and hydro nitrogen. Gufeng sources these supplies
largely from neighboring provinces and regions, such as Hebei and Shaanxi provinces, and the Municipality of Beijing, for the
economical transportation costs.

Our
products are packaged in bottles, bags and boxes. Each type of packaging material, along with packaging labels, is readily available
for purchase from manufacturers in Shaanxi, Beijing, Shandong and Zhejiang provinces.

Agricultural
Products

The
plants that generate our top-grade flowers and multi-colored seedlings are mainly planted and cultivated in research and development
facilities maintained by Yuxing. We purchase seeds of green vegetables and fruits from agricultural companies, such as RijkZwaan
Company, which imports the seeds from foreign markets, including Holland. We cultivate our agricultural products by applying fertilizers
produced by Jinong.

Inventory

For
our fertilizer products, our efficient production methods allow us to maintain appropriate inventory levels, which keep inventory
costs reasonable. We purchase raw materials and packaging materials based on demands and business forecasts. Products, in various
formulas and different batches, with customized volumes, are shipped to distributors and users after production in response to
the orders if we received.

For
our agricultural products, we maintain corresponding inventory to both the anticipated demand from customers and other needs,
as we often use certain agricultural products to serve our product testing base for research and development purpose.

Return
Policy

The
Company accepts returns of defective fertilizer products. During the fiscal year ended June 30, 2018, the Company did not experience
any significant returns.

Seasonality

The
peak season to sell fertilizer products is from January through June. However, during the fiscal year ended June 30, 2018, Jinong
did not experience significant seasonal variation with respect to its fertilizer sales since approximately 45.8% of its annual
sales revenue occurred in the third fiscal quarter (winter) and the fourth fiscal quarter (spring). Usually, Gufeng’s sales
of compound fertilizer undergoes significant seasonal variation in China. Correspondingly, during the fiscal year ended June 30,
2018, Gufeng experienced seasonal variation. The purchase of its raw material, basic fertilizers, is affected by the supply and
demand in the fertilizer market with seasonality. Over non-peak sales season, when the raw material price is low and economical,
Gufeng may choose to place larger orders for raw materials as its export business offsets the seasonality when exports are made
to southern Asia, such as India is needed, where their selling season corresponds to the non-peak season in China.

The
peak selling season for our agricultural products is from October till March, namely our second fiscal quarter (fall) and
the third fiscal quarter (winter). This is primarily due to the strong demand for high-end fruits and decorative flowers
during the holiday seasons.

12

Marketing,
Distribution and Customers

Overview

We currently market our own fertilizer
products to private wholesalers and retailers of agricultural farm products in 22 provinces, 4 autonomous regions and 4 central
government-controlled municipalities in China. For the fiscal year 2018, the following five PRC provinces collectively accounted
for 61.9% of our fertilizer manufacturing revenue: Hebei (26.2%), Heilongjiang (10.6%), Liaoning (9.2%), Inner Mongolia (8.3%)
and Shaanxi (7.7%). We believe this geographically diverse distribution helps us to become a leader in the compound fertilizer
market as compared to regional competitors because we are not heavily dependent on any single geographic area for sales and are
able to raise our brand and product awareness nationwide. We also manufacture our fertilizer products for export through contracted
distributors in foreign countries, including India and Africa. Total revenues from exported products accounted for approximately
0.1% of our total fertilizer revenues in fiscal 2018.

Our
agricultural products are distributed through various channels in Shaanxi Province and other provinces. Decorative flowers are
usually sold through our fertilizer distributors to end-users such as flower shops, luxury hotels and government agencies. Fruits
and vegetables are sold to high-end supermarkets and upscale restaurants. Seedlings are sold primarily to departments of city
planning.

A
multi-tiered product strategy allows us to tailor our fertilizer products to the needs and preferences of the various geographic
regions in China. Our fertilizers can be tailored to different crops grown in varying climate and soil conditions. For example,
climate and rainfall conditions in Southern and Eastern China allow farmers to grow high margin crops such as fruit and seasonal
vegetables. As a result, these farmers are willing to invest in expensive and specialized fertilizers. In contrast, we market
low-cost fertilizers to farmers in the Northwest areas of China due to the inclement weather.

Our
research and development capabilities allow us to tailor products to meet specific farming needs in considering different factors
such as crops species, humidity, weather and soil conditions.

The
sales segment utilizes each sales VIE’s distribution network to deliver various agriculture materials from upstream providers
such as manufacturers and wholesalers to downstream users and retailers. We aim to expand the sales VIEs network and integrate
them together to better meet customer’s demands with improved distribution efficiencies.

Marketing

Our
marketing staff is trained to closely work with distributors and customers, including retailers and farmers, providing professional
advice on customizing our products to customer needs and offering agricultural knowledge and other extensive customer support.
In addition, our employees educate and communicate with distributors and customers by regularly organizing training courses on
new agricultural techniques.

Compared
with industry norms, we believe our product development cycle of three to nine months is relatively short. Through our regular
collection of market data, including growth records of a variety of plants cultivated in different soil and climate conditions,
together with feedbacks from our end-users, we can conduct nationwide market analysis, ascertain new product needs, estimate demand
and customer demographics and develop new products tailored to current market needs.

Although
we utilize television advertisements and mass media, most of our marketing efforts are conducted through joint activities with
distributors. Our sales and marketing staff works with and trains distributors and retail clients through lectures and interactive
meetings. We emphasize the technological components of our products to end-users to help them understand the differences in products
and how to effectively use them. Word-of-mouth advertising and sample trials of new products in new areas are also essential components
of our marketing efforts. In addition, we have established nationwide telephone hotlines to answer questions and have constructed
an SMS text message platform to have real-time interaction with customers.

13

Our
best-selling self-manufactured fertilizers, based on revenues for the fiscal year ended June 30, 2018, are listed below:

Percent of

Volume

Revenues

Fertilizer

Ranking

Product Names

(Tons)

(USD)

Sales

1

Organic/Inorganic Compound Fertilizer (humic acid) NPK46%

136,060

345,310,884

24.7

%

2

Compound Fertilizer NPK40%

141,458

321,944,901

23.0

%

3

Jinong Guangpu Fertilizer (humic acid)

1,997

41,309,108

3.0

%

4

Jinong FHF Fertilizer (humic acid)

13,086

34,524,600

2.5

%

5

Jinong HXSGJ Fertilizer (humic acid)

1,625

34,044,535

2.4

%

Fertilizer
Products

The
fertilizer product market in China is highly fragmented. Our primary sales strategy is to establish contractual relationships
with qualified distributors throughout the country, who, in turn, will distribute our products to wholesalers and retailers, and
ultimately, the farmers.

As
of June 30, 2018, we sold our products through a nationwide constructed network of about 1,959 distributors covering 22 provinces,
4 autonomous regions and 4 central government-controlled municipalities in China.

The
distributors sell our products to the smaller, local wholesale and retail outlets who then sell to the end-users, typically farmers.
We do not grant provincial or regional exclusivity because there is currently no single distributor sufficiently dominant to warrant
exclusivity. We enter into non-exclusive written distribution agreements with chosen distributors that demonstrate their ability
in regional sales networks. The distribution agreements do not dictate distribution quantity because changes in weather and local
market could dramatically affect sales quotas.

For
the fiscal year ended June 30, 2018, self-manufactured sales to our top five distributors accounted for approximately 38.9% of
our revenues. As we do not depend on specific customers, we believe that the loss of single customers would not have any significant
effect on our business.

Agricultural
Products

We
distribute our agricultural products through several networks depending on the type of product. Our top-grade flowers are mainly
distributed through our fertilizer distribution network; our green vegetables and fruits are mainly distributed to a variety of
wholesale markets and supermarkets in Xi’an, while our multi-colored seedlings are distributed to the seedling centers and
planting companies in China with which we have had long-term cooperation.

Retail
Stores and Authorized Retailers

We
have successfully implemented two marketing programs in Shaanxi, Hebei, Anhui, Jiangsu and Guangzhou provinces. These marketing
programs consist of: (i) establishment of Company directly-owned retail stores to sell fertilizer products produced by Jinong
and Gufeng through the designated sales personnel (the “Pilot Program”) and (ii) selection of qualified retailers
from the Company’s distributor base to be designated as authorized retailers. With the Pilot Program, we have worked closely with
our distributors, with each distributor’s outlet having an assigned territory in order not to compete with other existing
distributors. We have entered into agreements with these retailers on their exhibits, and have well-positioned standardized shelf
and product displays in their retail stores. In addition, we provide the retailers with educational materials on proper product
use and billboard ads with our product logo to attract target farmers.

Sales
Segment

Strategically, supplemental to our manufacturing
business, we added a new business segment, the sales of fertilizer and other agriculture material products, to our business since
2016. The sales segment had provided supplemental revenue and earnings by covering more market areas, and selling more products
not only produced by ourselves but also by other manufacturers. We had been developing the sales segment mainly by acquiring control
of established sales ventures and continue to grow them. The sales segment utilizes the distribution network acquired from the
sales ventures to deliver various agriculture materials. For the fiscal year ended June 30, 2018, the sales segment sold $66,866,254
of agriculture materials, and accounted for 23.2% of our revenues.

14

Research
and Development

We
conduct the bulk of our research and development activities through Yuxing. Through Yuxing, we cultivate high-quality flowers,
green vegetables and fruits in our own greenhouses and sell them to various end-users, including airlines, hotels and restaurants.
Yuxing operates advanced research and development facilities that: (i) provide testing and an experimental data collection base
for new fertilizers produced by Jinong by simulating the growing conditions and development stages of a variety of plants, such
as flowers, vegetables and seedlings, (ii) increase our capability to produce more products while shortening the new product development
cycle, which allows us to release products to market quickly, thus increasing revenues and market share. In addition, our research
and development capabilities allow us to develop products tailored to specific farming needs generated by different crop species,
humidity, weather and soil conditions. Flowers, fruits and vegetables grown from experimental testing of Jinong’s humic
acid compound fertilizers are of high quality and are sold to local supermarkets and airline companies.

The
capital expenditure and other payments on Yuxing’s construction, net of accumulated depreciation, were approximately $11,031,011,
$12,124,940 and $13,300,313 during the fiscal years ending of June 30, 2018, 2017 and 2016, respectively. The research and development
center helps expanding our output of high quality agricultural products for commercial sale while providing an advanced testing
field for new products. The facility at Yuxing enhances our capability to produce more products while shortening the development
cycle, thus increase revenues and market share. In addition to developing new humic acid-based fertilizer products, we plan to
develop other agricultural derivatives such as humic-acid based organic pesticides, which can provide additional revenue sources.
For the fiscal year ended June 30, 2018, we sold approximately $10,485,030 of these agricultural products.

FY 2018

FY 2017

FY 2016

Machines, Buildings and Equipment

$

10,967,437

$

12,120,687

$

13,236,949

Construction in Progress

$

63,574

$

63,253

$

63,364

Total

$

11,031,011

$

12,124,940

$

13,300,313

New
Product

With
our research and development capabilities, we have developed 726 products and continued to develop new products. During the fiscal
year ended June 30, 2018, we developed 7 new products, among which include several powder fertilizers, liquid fertilizers and
compound fertilizers.

In
addition to developing new fertilizer products, we also developed soilless seeding and breeding of colored-leaf plants, rare flowers
and new species of fruits and vegetables.

Intellectual
Property

We
hold the following trademarks registered with the PRC Trademark Offices of National Industrial and Commerce Administrative Bureau
(the “PRC Trademark Offices”):

Trademark

Registration Number

Valid term

Huang Cheng Gen

No.5219720

June 28, 2009 to June 27, 2019

Mei Er An

No.1508004

January 21, 2011 to January 20, 2021

KEBA

No.10045980

December 07, 2012 to December 06, 2022

KEBA

No.10046405

December 14, 2012 to December 13, 2022

KEBA

No.10045898

March 07, 2013 to March 06, 2023

KEBA

No.10046344

March 07, 2013 to March 06, 2013

AGR GFJ

No.3320281

May 28, 2014 to May 27, 2024

SPR HOP

No.3320282

May 28, 2014 to May 27, 2024

T.J.Y

No.3320283

May 28, 2014 to May 27, 2024

KEBA

No.760379

August 14, 2005 to August 13, 2025

A
registered trademark is protected in China for a term of 10 years, and is renewable for another 10-year term under the PRC trademark
law, if the renewal application is submitted to the PRC Trademark Offices within 6 months prior to the expiration of the previous
term.

15

Listed
below are Jinong’s four patents for a fertilizer formulation and a proprietary production line and manufacturing processes.

Inventor’s

Date
of

Patent/Pending

Patent
No.

Name
and

Date
of

Publication
and

Patent
Application

Type
of Patent

/Application
No.

Patent
Holder

Application

Term

Patent:

Utility
Model

Patent
No.: ZL

Inventor:
Tao Li

May
29, 2007

May
14, 2008;

Production
facility of Humic Acid Products

Patent

NL
2007 20031884.2

Patent
Holder:
Jinong

10 Years

Patent:

Utility
Model

Application
No.:

Applicant:

February
1, 2007

November
24,

Method
and recipe of the water soluble humic acid fertilizers

Patent

ZL200710017334.x

Jinong

2010;
20 years

Patent:

Utility
Model

Application
No.:

Applicant:

September
22, 2011

December
4, 2013;

Production
method of Organic Fertilizer

Patent

ZL201110282544.8

Jinong

20
years

Patent:

Utility
Model

Application
No.:

Applicant:

January
17, 2014

October
19, 2014;

Production
method of Multifunctional liquid calcium fertilizer

Patent

NL
201410020442.2

Jinong

20
Years

The
PRC Patent Law was adopted by the PRC National People’s Congress in 1984 and was subsequently amended in 1992 and 2000. Under
the PRC Patent Law, an invention patent is valid for a term of 20 years and a utility or design patent is valid for a term of
10 years. Both of our registered patents are all utility patents. Any use of our patent without consent or a proper license from
us constitutes an infringement of patent rights.

In
addition to trademark and patent protection in China, we also rely on contractual confidentiality provisions to protect our brand
and intellectual property rights. To safeguard these rights our research and development personnel and executive officers are
subject to confidentiality agreements. They are also subject to a non-compete covenant following the termination of employment.
They also agree that all work products belong to us. Moreover, we take steps to limit the number of personnel involved in the
production process and, instead of disclosing fertilizer ingredients to employees, we refer to the ingredients by numbers.

Competitive
Strengths

We
believe our products possess the following competitive advantages which enable us to compete in the PRC fertilizer market.

Nation-wide
sales network. In the highly fragmented Chinese fertilizer market, we have established our own distribution channels with
private distributors that sell our products to retail stores and farmers throughout China. We have over 1,959 distributors nationwide
across 22 provinces, 4 autonomous regions and 4 central government-controlled municipalities in China. Most of our competitors
do not have a sales team as large as ours that specializes in the sale of compound fertilizer products. Moreover, we believe the
regional strengths of Gufeng’s distribution network have expanded and will continue to expand our sales coverage to certain
cities and counties as well as foreign markets.

16

Strong
Research and Development. Our research and development is managed effectively. Typically, it takes only three to nine months
from the decision to develop a new product to mass production, which ensures product flow and helps to maintain market share.
Our strong research and development department is based on our intelligent greenhouse facilities. The advanced equipment and soil-free
techniques in such facilities simulate the natural environment in different areas and control selected factors. Since most of
Jinong’s experimental work is conducted in Yuxing’s greenhouse facilities, thereby speeding up development cycles,
we can reduce costs without sacrificing accurate results. During the fiscal year ended June 30, 2018, we generated approximately
$10,485,030 revenue from sales of Yuxing’s agricultural products, and we anticipate that this source of revenue will grow
in the future. We have built 98 sunlight greenhouses and six intelligent greenhouses over an 88-acre parcel of land relating to
Yuxing’s pending research and development center, which expands output of high quality agricultural products for commercial sale
while providing an advanced testing field for new products.

Gufeng
and Tianjuyuan have developed seven technologies:

(1)

Drying fan for urea-based compound fertilizer;

(2)

Heat balance control system for flexible compound
fertilizer;

(3)

Automatic control system for the anti-block of compound
fertilizer;

(4)

Water control technology for low nitrogen, low potassium
and high phosphorus compound fertilizer;

(5)

Manufacturing technology for salt-alkaline resistance
and soil improvement of compound fertilizer (The company won the third prize for “Progress in Science and Technology in
Pinggu District Beijing” with this technology);

Manufacturing technology for the sustained release
of blending and compound fertilizer

While
we believe our greenhouse facilities provide us with a competitive advantage over the competitors, some of them may still have
better understanding in certain local markets where they successfully marketed products over a period and have developed specifically
formulated fertilizers for local plants, soil and climate conditions. To enhance our competitiveness, we will seek to diversify
our fertilizers to benefit a wider range of plants and soil conditions.

Well-known
Brands. We believe customers have strong brand recognition and make purchase decisions accordingly. “Jinong”,
“KEBA” and “T.J.Y” are registered trademarks and are well recognized by end users; in addition, certain
large national fertilizer traders, such as Sinoagri Holding Company Limited, one of the largest domestic fertilizer traders in
China, had strong brand preference for Gufeng’s fertilizer products. Gufeng sells its products under four brands, namely
“KEBA”, “Mei Er An”, “Huangchenggen” and “SPR HOP”. Tianjuyuan’s products
are marketed under the brands “AGR GFJ” and “T.J.Y.” The primary products sold under the Gufeng and Tianjuyuan
brands include organic/inorganic compound fertilizer (humic acid) with NPK ≥ 40%, and organic /inorganic compound fertilizer
(humic acid) with NPK ≥ 48%.

Automated
Production Line and Process. All Jinong’s major production procedures are controlled by a centralized computer system
only accessible by authorized personnel. Jinong’s production lines are fully automated to ensure that content in each product
is measured exactly according to its recipe by linking the computer server with the electronic weights on each material input
bin. In addition, spectral analysis is used to accurately check the composition of materials. During the fiscal year 2018, Jinong’s
highly advanced production lines can manufacture a multi-tiered line of 142 fertilizer products, and we believe that Jinong’s
production lines are among the few advanced lines in the Chinese industry. As mentioned above, we have patent protection for Jinong’s
two proprietary production lines, one of which has medical grade production equipment with precise quality control, and the other
can produce liquid, powder and granular fertilizers. We currently have an annual production capacity of 555,000 metric tons.

17

Competition

Fertilizer
Products

Based
on our internal estimates, there are approximately 2,000 organic fertilizer manufacturers in China, with no discernible market
leaders in the sector. We believe our competitors are currently comprised of approximately 90% small-sized local manufacturers
and 10% large national manufacturers. We believe we are among the large national fertilizer manufacturers.

Gufeng’s
primary competitor is Stanley Fertilizer Co., Ltd. (“Stanley”), a compound fertilizer manufacturer based in Linyi,
Shandong Province, which was listed on Shenzhen Stock Exchange (China) in June 2011. Stanley manufactures various kinds of compound
fertilizers and tailored fertilizers which directly compete with Gufeng.

The
smaller competitors of ours are generally producers of amino acid compound fertilizers, which are very price competitive.

However,
lacking adequate quality or process control technologies, these companies often sell products with inconsistent quality.

The
Chinese fertilizer market has been fully opened to foreign companies since China’s entry into the World Trade Organization
in December 2006. Accordingly, the PRC government has increased its fertilizer import quota and, since January 2007, has reduced
the import tariffs on foreign fertilizer to 1%. However, foreign fertilizers are generally more expensive than PRC manufactured
fertilizers and are not customized to soil conditions influenced by China’s diverse climate and terrains.

Top-grade
Flowers: The growers in the flowers and flower seedlings businesses are largely local based. We believe that our flower products
have comparative advantages in terms of the advanced technologies we apply, the superior species of the seedlings we select and
the efficiency and stability due to strict quality control. In addition, our greenhouse facilities enable us to produce flower
seedlings year-round.

Green
Vegetables and Fruits: Our competitors are primarily the vegetable planting centers and planters in Shaanxi, Shandong and
Gansu provinces that produce vegetables such as cucumbers and peppers. With the aid from our green fertilizers that improve soil
conditions and limit bacterial growth, our competitive advantage lies in the advanced greenhouse facilities which contribute to
the pollution-free end products.

Multi-colored
Seedlings: In the market of Multi-colored seedlings, one of our competitors is Kunming Anthura Horticulture Co., Ltd. Some
of our products, such as red photiniaserrulata, are also imported from other countries with high survival rates.

Government
Regulation

Our
business operations are subject to various laws, including environmental, health and workplace safety laws issued by governmental
agencies on the provincial and state levels. Business and company registrations, along with the products, are monitored through
the issuance of licenses and certificates including the following:

“Green”
Certification. Except for those manufactured by Gufeng and Tianjuyuan, all our fertilizer products are certified by the CGFDC
as “Green Food Production Material”. Currently, the CGFDC provides two different certifications within the green food
industry: “Green Food Certification” granted to edible foods, and “Green Food Production Material Certification”
granted to production materials such as our fertilizers. A “Green Food Production Material Certification” was issued
to Jinong on March 2015 and renewed in 2018. The certificate is renewable with an application within 90 days prior to the expiration.

Operating
license. Our operating license enables us to (1) undertake research and development, production, sales and services of humic-acid
liquid fertilizer, (2) sales of pesticides, and (3) export and import of products, technology and equipment. Jinong’s license
(Registration No. 610000100003655) is valid until August 8, 2057, and the license is renewable. Gufeng and Tianjuyuan maintain
valid operating licenses with expiration dates of August 1, 2043 (for the license with Registration No. 110000008250498) and August
7, 2021 (for the license with Registration No.110117003157142), respectively.

Fertilizer
Registration. Fertilizer registration is issued by the Ministry of Agriculture of the PRC and is required for producing fertilizers.
There are two kinds of registrations: interim registration and formal registration. The interim registration is valid for one
year and applies to fertilizers in the stages of in-the-field testing and test selling; Fertilizers that have completed in-the-field
testing and test selling must obtain formal registration, which, if granted, is valid for five years, and thereafter must be renewed
every five years. Jinong currently holds 16 formal fertilizer registration certificates. Gufeng and Tianjuyuan hold 11 interim
fertilizer certificates and 259 formal certificates.

As
of the date of this Report, we believe we are in material compliance with all registrations and requirements for the issuance
and maintenance of all licenses required to conduct our businesses and operations.

18

Item 1A.

Risk Factors

Investing
in our securities involves risk. Before making an investment decision, you should carefully consider the following information
about these risks, together with the other information contained in this Report. Our business, results of operations or financial
condition could be adversely affected by any of these risks, which could result in a decline in the market price of our securities,
causing you to lose all or part of your investment.

Risks
Related to Our Business

The
industry in which we do business is highly fragmented and competitive and we face competition from numerous fertilizer manufacturers
in China and elsewhere.

We
compete with numerous local Chinese fertilizer manufacturers. Although we may have greater resources than many of our competitors,
most of which are small local fertilizer companies and it is possible that these competitors have better access in certain local
markets, an enhanced ability to customize products to certain regions and better established local distribution channels. We also
compete with large national competitors in the PRC. Although we have advanced automated humic acid-based fertilizer production
lines and greenhouse supported research and development centers, we cannot assure that such large competitors will not develop
their own similar production or research and development facilities. Further, China’s access into the World Trade Organization
has led to increased foreign competition for us. International producers and traders import products into China that generally
are of higher quality than those produced by the local Chinese manufacturers. If they are localized and become familiar with fertilizers
we produce, we may face additional competition. If we are not successful in our research, development and production of new products
and/or in our marketing and advertising efforts to increase awareness of our brands, our revenues could decline, which might have
a material adverse effect on our business, financial condition, results of operations and share price.

Our
major competitors may be able to endure downturns in our industrial sector more than we are. When facing reduced demand for our
products, we can either choose to maintain market share by reducing selling prices to meet competition, or to maintain the prices
while sacrificing a portion of market share. The overall profitability would be reduced in either case. In addition, we cannot
assure you that additional competitors will not enter into our existing markets, or that we will be able to compete successfully
against existing or new competitors.

If
we are unable to design, manufacture, and market fertilizer products in a timely and efficient manner, we may not remain as competitive.

Many
of our fertilizer products are characterized by short product development cycles as they target at the unique climate and soil
conditions where our customers are located. Accordingly, we devote a substantial amount of resources to product development. To
compete successfully, we must develop new and/or improved fertilizer products that cater to customer needs. New fertilizers may
not be easily developed. As a result, we may experience performance difficulties, which may result in delays, setbacks and cost
overruns. Our inability to develop and offer new and/or improved fertilizer products or to achieve customer acceptance of these
products could limit our ability to compete in the market or to grow revenues at a desired rate.

19

Our
proprietary fertilizer formula may become obsolete or be unintentionally disclosed to competitors, which could materially adversely
affect the competitiveness of our future fertilizer products.

Our
proprietary fertilizer formula is the base for producing our fertilizer. Our future success will depend upon our ability to address
the increasingly sophisticated needs of our customers by supplying existing humic acid fertilizer products and by developing new
products on a timely basis that keep pace with the evolving industry standards and changing customer requests. If our proprietary
formula becomes obsolete as our competitors develop better products than ours, our future business and financial results could
be adversely affected. In addition, although we have entered into confidentiality agreements with key employees, we cannot assure
that if there is a breach of such agreement by an employee, we would not lose any competitive advantage that we currently have
with respect to our proprietary fertilizer formula. If we are forced to take legal action to protect our proprietary formula,
significant expense will incur and a favorable outcome cannot be guaranteed.

If
our warehouse selling and credit sales of certain fertilizer products continue to increase and we fail to collect the accounts
receivables that are due in a timely manner, our financial condition and results of operation may be materially adversely affected.

We had accounts receivable of $174,460,937
as of June 30, 2018, as compared to $139,596,455 and $118,021,105 as of June 30, 2017 and 2016, respectively, increases of $34,864,482
and $24,609,803, or 25.0% and 21.0% year over year. The increase was primarily due to the increased credit sales of our fertilizer
products and added receivables from sales segments, and the marketing of Jinong’s humic acid fertilizer products including
liquid and powder fertilizers. We offer a tentative credit period up to 180 days to our customers. Although we perform routine
assessment of our customers’ creditworthiness, evaluate the structure and collectability of accounts receivable and provide
an allowance for doubtful accounts when necessary, we may not be able to receive or collect payment for our products on time or
at all if our customers encounter financial difficulties. Any such failure may have a material adverse impact on our financial
condition and results of operation.

Our
concentration of customers could have a material adverse effect on us.

Gufeng’s top five distributors accounted
for 74.5% of its revenues, with its largest distributor accounting for 15.6% of total revenues for the 2018 fiscal year. Jinong’s
top five distributors accounted for 2.6% of its fertilizer revenues for the fiscal year ended June 30, 2018. If those major customers
reduce or discontinue their product purchases from us and we are unable to find their replacements, it would adversely affect our
results of operations.

If
we fail to adequately protect or enforce our intellectual property rights, we may be exposed to intellectual property infringement
and the value of our intellectual property rights could diminish.

Our
success, competitive position and future revenues will depend in part on our ability to obtain and maintain patent protection
for our products, methods, processes and other technologies, to preserve our trade secrets, to prevent third parties from infringing
on our proprietary rights and to operate without infringing the proprietary rights of third parties.

Jinong
is the holder of four registered patents. The first patent is a fertilizer formulation named “Method and Recipe of the Water
Soluble Humic Acid Fertilizers”. The second patent, “Production Facility of Humic Acid Products”, relates to
our proprietary production line and manufacturing processes in the PRC. The third patent is “Production Method of Organic
Fertilizer”. The fourth patent is “Production method of Multifunctional liquid calcium fertilizer”. Gufeng and
Tianjuyuan do not have patents but currently possess seven proprietary technologies. However, we cannot predict the degree and
range of protection patents and confidentiality agreements with respect to proprietary technologies will defense us against competitors.
Third parties may find ways to invalidate or otherwise circumvent our patents and proprietary technologies. Third parties may
attempt to obtain patents claiming aspects like our patent applications. We cannot assure you that our current or potential competitors
do not have, and will not obtain, patents that will prevent, limit or interfere with our ability to make, use or sell our products
in the PRC.

If
we need to initiate litigation or administrative proceedings, such actions may be costly and may divert management attention as
well as consume other resources which could otherwise have been devoted to our business. An adverse determination in any such
litigation will impair our intellectual property rights and may harm our business, prospects and reputation. In addition, historically,
implementation of PRC intellectual property-related laws has been lacking, primarily because of ambiguities in the PRC laws and
difficulties in enforcement. Accordingly, intellectual property rights and confidentiality protections in China may not be as
effective as that in the United States or other countries, which increases the risk that we may not be able to adequately protect
our intellectual property. Moreover, litigation may be necessary in the future to enforce our intellectual property rights. Future
litigation could result in substantial costs and diversion of our management’s attention and resources, and could disrupt
our business, as well as have a material adverse effect on our financial condition and results of operations. Given the relative
unpredictability of China’s legal system and potential difficulties enforcing court judgments in China, there is no guarantee
that we would be able to halt any unauthorized use of our intellectual property through litigation.

20

If
we infringe on the intellectual property rights of third parties, we could be prevented from selling products, forced to pay damages
and compelled to defend against claims by third parties, which, if successful, could cause us to pay significant damage awards
and incur other costs.

Our
success also depends in large part on our ability to use and develop our technology and know-how without infringing the intellectual
property rights of third parties. As litigation becomes more common in the PRC in resolving commercial disputes, we face a higher
risk of being the subject of intellectual property infringement claims. The validity and scope of claims relating to humic acid
fertilizer production technology and related devices and machine patents involve complex technical, legal and factual questions
and analysis and, therefore, may be highly uncertain. The defense and prosecution of intellectual property suits, patent opposition
proceedings and related legal and administrative proceedings can be both costly and time consuming and may significantly divert
the efforts and resources of our technical and management personnel. An adverse determination in any such litigation or proceedings
to which we may become a party could subject us to significant liability, including damage awards to third parties, require us
to seek licenses from third parties (which may not be available on commercially reasonable terms, if at all), to pay ongoing royalties,
or to redesign our products or subject us to injunctions preventing the manufacture and sale of our products. Protracted litigation
could also result in our customers or potential customers deferring or limiting their purchase or use of our products until resolution
of such litigation.

Disruptions
in the supply of raw materials used in our products could cause us to be unable to meet customer demand in a timely manner, which
could result in the loss of customers and net sales or could result in a lower profit margin for us.

Jinong
is supplied with approximately 50 different types of raw materials, of which weathered coal is the primary one as it is the raw
material from which humic acid is extracted and applied to the manufacturing of our products. Although there are numerous weathered
coal suppliers available in market, we have been using Inner Mongolia Tianlibao Fertilizer Co., Ltd. (“Tianlibao”)
as our main supplier of weathered coal because of the abundance and high quality of weathered coal in the Inner Mongolia Autonomous
Region. Our supply agreement with Tianlibao is renewed monthly. If Tianlibao does not intend to renew the supply agreement with
us for any reason, or if there are any business interruptions at Tianlibao and we are unable to locate an alternative supplier
in a timely manner or on the same terms, we may not be able to meet customer demand on humic acid-based fertilizers in a timely
manner or maintain our standards of quality for humic acid-based fertilizers during the transitional period, which may result
in the loss of customers and net sales or we may not be able to keep our profit margin as before for our humic acid-based fertilizers.

Gufeng
and Tianjuyuan are supplied with over fifty types of raw materials from a diversified pool of suppliers. Neither Gufeng nor Tianjuyuan
are dependent on any single supplier for its raw materials; however, if we experience a significant increase in demand or if we
need to replace any of these suppliers, we cannot be assured that the adequate supply of raw materials or a replacement supplier
will be acquired in a timely manner to avoid any material adverse effect on our business operations and financial condition.

Any
significant fluctuation in our production costs may have a material adverse effect on our operating results.

The
prices for the raw materials and other inputs to manufacture our fertilizer products are subject to market forces largely beyond
our control, including the price of weathered coal, energy costs, mineral and non-mineral elements, and freight costs. The costs
for these inputs may fluctuate significantly based upon changes in the economy and markets. Although we may pass any increase
of such costs to our customers, in the event we are unable to do so, we could incur significant losses and a diminution of our
share price.

We
do not presently maintain business disruption insurance. Any disruption of the operations in our factories would damage our business.

Our
operations could be interrupted by fire, flood, earthquake and other events beyond our control for which we do not carry adequate
insurance. While we have property damage insurance and automobile insurance, we do not carry business disruption insurance, which
is not readily available in China. Any disruption of the operations in our factories would have a significant negative impact
on our ability to manufacture and deliver products, which would cause a potential diminution in sales, the cancellation of orders,
damage to our reputation and potential lawsuits.

We
do not presently maintain product liability insurance, and our property and equipment insurance does not cover the full value
of our property and equipment, which leaves us with exposure in the event of loss or damage to our properties or claims filed
against us.

We
currently do not carry any product liability or other similar insurance. We cannot assure that we would not face liability in
the event of the failure of any of our products. We also cannot assure you that, especially as China’s domestic consumer
economy and industrial economy continues to expand, product liability exposure and litigation will not become more commonplace
in the PRC, or that we will not face product liability exposure or actual liability as we expand our sales into international
markets where product liability claims could be more prevalent.

21

The
occurrence of any acts of God, war, terrorist attacks and other emergencies which are beyond our control may have a material adverse
effect on our business operations and financial condition.

Acts
of God, war, terrorist attacks and other emergencies which are beyond our control may have a material adverse effect on the economy
and infrastructure in the PRC and on the livelihood of the Chinese population. Our business operations and financial condition
may be materially and adversely affected should such events occur. We cannot give assurance that any acts of God such as floods,
earthquakes, drought or any war, terrorist attack or other hostilities in any part of the PRC or even the world, potential or
threatened, will not, directly or indirectly, have a material adverse effect on our business, financial condition and operating
results.

If
we cannot renew our fertilizer registration certificates, we will be unable to sell some or all our products. If we do not receive
the formal fertilizer registration certificates for our new products, upon the expiration of the temporary registration certificates,
we cannot continue to produce such new products.

All
fertilizers produced in China must be registered with the PRC Ministry of Agriculture. No fertilizer can be manufactured without
such registration. There are two kinds of registrations: interim registration and formal registration. The interim registration
is valid for one year and applies to fertilizers in the stages of in-the-field testing and test selling. Fertilizers that have
completed in-the-field testing and test selling must obtain formal registration, which is valid for five years, and thereafter
must be renewed each five year. Jinong has 16 formal registration certificates. Gufeng and Tianjuyuan have 19 interim fertilizer
certificates and 259 formal certificates. We plan to apply for formal certificates for each of our interim certificates before
the applicable expiration dates.

Our
belief is that the PRC Ministry of Agriculture generally grants an application for renewal in the absence of illegal activity
by the applicant. However, there is no assurance that the PRC Ministry of Agriculture will grant renewal of our formal Fertilizer
Registration Certificates. If we cannot obtain the necessary renewal, we will not be able to manufacture and sell such fertilizer
products without certificates which will cause the termination of commercial operations for such fertilizer products. With respect
to the transformation of the interim fertilizer registration certificates to formal fertilizer registration certificates, we believe
that we can receive formal fertilizer registration certificates for our 19 interim fertilizer registration certificates in due
course; however, if the government imposes additional burden on the application procedure or put temporary suspension on its certificate
granting process due to any unexpected incidents in China, we cannot assure that our formal fertilizer registration certificates
can be obtained without delay or can be obtained at all in which case our production could be adversely affected.

We
may not possess all the licenses required to operate our business, or may fail to maintain the licenses we currently hold. This
could subject us to fines and other penalties, which could have a material adverse effect on our results of operations.

In
addition to a fertilizer registration certificate, we are required to hold a variety of other permits, licenses and certificates
to conduct our business in China. We may not possess or receive all the permits, licenses and certificates required for our business
or for which application has been made. In addition, there may be circumstances under which the approvals, permits, licenses or
certificates granted by the governmental agencies are subject to change without substantial notice in advance. If we fail to obtain
or to maintain such permits, licenses or certificates or renewals are granted with onerous conditions, we could be subject to
fines and other penalties and be limited in the number or the quality of the products that we would be able to offer. As a result,
our business, result of operations and financial condition could be materially and adversely affected.

22

Potential
environmental liability could have a material adverse effect on our operations and financial condition.

Our
manufacturing operations are subject to numerous laws, regulations, rules and specifications relating to the environment, including,
among others, the Integrated Emission Standard of Air Pollutants GB 16297-1996 and the Standard of Environmental Noise of Urban
Area GB 3096-93. Failure to comply with any laws and regulations and future changes to them may result in significant consequences
to us, including civil and criminal penalties, liability for damages and negative publicity. Our business and operating results
may be materially and adversely affected if we were to be held liable for violating existing environmental regulations or if we
were to incur significant expenditures to comply with environmental regulations affecting our operations.

Our success depends on our management team
and other key personnel, the loss of any of whom could disrupt our business operations.

We depend, to a large extent,
on the abilities and participation of our current management team, with a reliance upon Mr. Zhuoyu “Richard” Li.,
our CEO and Chairman of the Board of Directors. The loss of the services of Mr. Li, for any reason, may have a material adverse
effect on our business and prospects. We do not carry key man life insurance for our key personnel.

The agricultural chemicals
business is specialized and requires the employment of personnel with significant scientific and operational experience in the
industry. Accordingly, we must attract, recruit and retain a sizeable workforce of technically and scientifically competent employees.
Our ability to effectively implement our business strategy will depend upon, among other factors, the successful recruitment and
retention of additional management and other key personnel that have the necessary scientific, technical and operational skills
and experience with the fertilizer industry. These individuals are difficult to find in the PRC and we may not be able to retain
such skilled employees. If we are unable to hire individuals with the requisite experience, we may not be able to produce enough
products to optimize profits, and the research and development initiatives may be delayed which will negatively impact our financial
condition, results of operations and share price.

Mr. Zhuoyu “Richard” Li., our Chairman
and CEO may not devote all his time to our business.

Our Chairman and CEO, Mr.
Zhuoyu “Richard” Li., also serves as Chairman of Xi’an Techteam Science & Technology Industry (Group) Co.
Ltd., a company engaged in hi-tech application fields in China, and Chairman and CEO of Xi’an Techteam Investment Holding
(Group) Co., Ltd, a holding company for certain entities such as Gem Grain. This may give rise to further allocation of Mr. Li’s
time to each business. While Mr. Li anticipates having sufficient time to devote to our business, a lack of adequate time spent
by him on our business may adversely affect our business, financial condition, results of operations and share price.

If
we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report
our financial results. As a result, current and potential investors could lose confidence in our financial reporting, which could
harm our business and have an adverse effect on our stock price.

Pursuant
to Section 404 of the Sarbanes-Oxley Act of 2002, we are required to annually furnish a report by our management on our internal
control over financial reporting. Such report must contain, among other matters, an assessment by our principal executive officer
and our principal financial officer on the effectiveness of our internal control over financial reporting, including a statement
as to whether our internal control over financial reporting is effective as of the end of our fiscal year. This assessment must
include disclosure of any material weakness in our internal control over financial reporting identified by management. Performing
the system and process documentation and evaluation needed to comply with Section 404 are both costly and challenging. If we fail
to maintain the adequacy of our internal controls, as such standards are modified, supplemented or amended from time to time,
we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal controls over financial
reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002. We cannot provide assurance that we will not fail
to achieve and maintain an effective internal control environment on an ongoing basis, which may cause investors to lose confidence
in our reported financial information and have a material adverse effect on the price of our common stock.

23

We
are responsible for the indemnification of our officers and directors.

Our
Bylaws provide for the indemnification of our directors, officers, employees, and agents, under certain circumstances, against
costs and expenses incurred by them in any litigation to which they become a party arising from their association with or activities
on our behalf. Consequently, we may be required to expend substantial funds to satisfy these indemnity obligations.

Our
inability to effectively improve the financial performance of Gufeng may have a material adverse effect on our business, financial
condition and results of operations.

While
Gufeng had sales revenues of $112,983,573 for its fiscal year ended June 30, 2018, Gufeng’s net income for such period was
$7,172,837. This was primarily due to the lower profit margins on Gufeng’s products, inefficiencies in production and daily
operations and negative working capital. In addition, rising transportation costs passed on by Gufeng’s distributors may
further erode margins on Gufeng’s products. As Gufeng is based in Beijing, it is susceptible to rising costs of labor common
in large cities such as Beijing, which may make it difficult for us to expand the workforce of Gufeng and Tianjuyuan to meet our
strategic goals

Although
we have made progress in terms of integrating Gufeng’s employees, products and distribution network into our business during
the past 12 months, there is no assurance that we will be able to continue effectively to do so, which may result in a material
adverse effect on our business, financial condition and results of operations.

We
have not obtained the land use right over the premises on which certain facilities of Gufeng, our indirect, wholly-owned subsidiary,
is located. As a result, the lack of a proper title certificate may jeopardize our right to use the premises and our possession
of the buildings we built on such premises.

Through
Tianjuyuan, we lease approximately 47,333 square meters (509,488 square feet) of land in the Ping Gu District of Beijing (the
“Premises”). Under the lease dated February 16, 2004 with the village committee of Dong Gao Village and Zhen Nan Zhang
Dai Village in the Beijing Ping Gu District (the “Lease”), Tianjuyuan leases the land at an annual rent of RMB 35,500
(approximately $5,361). The term of the Lease is from February 1, 2004 to January 31, 2054. We were informed by our PRC counsel
that the Lease is invalid and unenforceable pursuant to the PRC Land Administration Law and related regulations. Therefore, we
have been in the process of applying for the proper land use right certificate from the relevant government authorities to legitimize
our right over the Premises. As of the date of this report, we were informed by the local government that our application materials
for the land use right in issue has been moved up from the department in charge of general matters to the land administrative
department of the local government and is under their review. However, there can be no assurance that such land use right certificate
will be granted to us. Until we obtain the land use right certificate, there is a risk that the PRC government may declare the
Lease invalid, evict our personnel from the Premises and tear down the buildings we built on the Premises. As of the date of this
Report, we have no knowledge of any pending or threatened governmental actions relating to the Premises.

A
severe or prolonged downturn in the global economy could materially and adversely affect our business and results of operations.

The
global market and economic conditions during the years 2008 through 2018 were unprecedented and challenging, with recessions occurring
in most major economies. Continued concerns about the systemic impact of potential long-term and wide-spread recession, energy
costs, geopolitical issues, and the availability and cost of credit have contributed to increased market volatility and diminished
expectations for economic growth around the world. The difficult economic outlook has negatively affected businesses and consumer
confidence and contributed to volatility of unprecedented levels.

The
PRC economy also faces challenges. The PRC government has implemented various measures recently to curb inflation. If economic
growth slows or an economic downturn occurs, our business and results of operations may be materially and adversely affected.

24

Risks
Related to Doing Business in the PRC

Substantially
all our assets and operations are in the PRC, and substantially all our revenue is sourced from the PRC. Accordingly, our results
of operations and financial position are subject to a significant degree to economic, political and legal developments in the
PRC, including the following risks:

Changes
in the policies of the PRC government could have a significant impact upon the business we may be able to conduct in the PRC and
the profitability of such business.

The
PRC’s economy is in a transition from a planned economy to a market oriented economy, subject to five-year and annual plans
adopted by the government that set national economic development goals. Policies of the PRC government can have significant effects
on economic conditions in China. Our interests may be adversely affected by changes in policies by the PRC government, including:

●

changes
in laws, regulations or their interpretation;

●

confiscatory
taxation;

●

restrictions
on currency conversion, imports or sources of supplies and export tariff;

●

expropriation
or nationalization of private enterprises.

Although
the PRC government has been pursuing economic reform policies for more than two decades, we cannot assure you that the government
will continue to pursue such policies or that such policies may not be significantly altered, especially in the event of a change
in leadership, social or political disruption, or other circumstances affecting political, economic and social life in China.

The
PRC laws and regulations governing our current business operations are sometimes vague and uncertain. Any changes in such PRC
laws and regulations may have a material and adverse effect on our business.

We
and any future subsidiaries are considered foreign persons or foreign funded enterprises under PRC laws, and we are subject to
PRC laws and regulations. These laws and regulations are sometimes vague and may be subject to future changes, and their official
interpretation and enforcement may involve substantial uncertainty. The effectiveness of newly enacted laws, regulations or amendments
may be delayed, resulting in detrimental reliance from foreign investors. New laws and regulations that affect existing and proposed
future businesses may also be applied retroactively. We cannot predict what effect the interpretation of existing or new PRC laws
or regulations may have on our business.

We
derive a substantial portion of our revenues from sales in the PRC and any downturn in the Chinese economy could have a material
adverse effect on our business and financial condition.

Substantially
all our operations are conducted in the PRC and substantially all our revenues are generated from sales in the PRC. We anticipate
that revenues from sales of our products in the PRC will continue to represent a substantial proportion of our total revenues
soon. Any significant decline in the condition of the PRC economy could, among other things, adversely affect the consumption
of our products, which in turn would have a material adverse effect on our revenues and profitability.

Inflation
in the PRC could negatively affect our profitability and growth.

While
the PRC economy has experienced rapid growth, it has been uneven among various sectors of the economy and in different geographical
areas of the country. Rapid economic growth can lead to growth in the money supply and rising inflation. If prices for our products
do not rise at a rate that is sufficient to fully absorb inflation-driven increases in our costs of supplies, our profitability
can be adversely affected.

According
to the International Monetary Fund or IMF, the inflation rate in China fluctuated on an annual basis from a low rate of -1.4%
in 1999 to the highest rate of 5.9% in 2008. The inflation rate was 1.4%, 3%, and 5.2% in 2015, 2016 and 2017, respectively. These
fluctuations and economic factors have led to the adoption by the Chinese government, from time to time, of various corrective
measures designed to restrict the availability of credit or regulate growth and contain inflation. To control inflation in the
past, the PRC government has imposed controls on bank credits, limits on loans for fixed assets and restrictions on state bank
lending. The implementation of these and other similar policies can impede economic growth and thereby harm the market for our
products.

25

Our
subsidiaries are subject to restrictions on paying dividends and making other payments to our subsidiary, Green New Jersey; as
a result, we might therefore be unable to pay dividends to you.

We
are a holding company incorporated in the State of Nevada and do not have any assets or conduct any business operations other
than our investments in our subsidiaries, Green New Jersey, Jinong, Gufeng, and the VIE companies. Because of our holding company
structure, we rely entirely on dividends payments from our subsidiaries in the PRC. PRC regulations currently permit payment of
dividends only out of accumulated profits, as determined in accordance with PRC accounting standards and regulations. Our subsidiaries
are also required to set aside a portion of its after-tax profits according to PRC accounting standards and regulations to fund
certain reserve funds. We may experience difficulties such as lengthy processing time from the foreign exchange administrative
bureau’s side and formality requirement on paperwork in completing the administrative procedures necessary to obtain and
remit foreign currency. Furthermore, if any of our subsidiaries incurs debt on its own in the future, the instruments governing
the debt may restrict its ability to pay dividends or make other payments. If we or Green New Jersey are unable to receive any
profits from the operations of our subsidiaries in the PRC, we may be unable to pay dividends to our common stock holders.

Governmental
control of currency conversion may affect the value of our common stock.

The
PRC government imposes controls on the convertibility of Renminbi (“RMB”) into foreign currencies and, in certain
cases, the remittance of currency out of the PRC. We receive substantially all our revenues in RMB, which is currently not a freely
convertible currency. Shortages in the availability of foreign currency may restrict our ability to remit sufficient foreign currency
to pay dividends, or otherwise satisfy foreign currency denominated obligations. Under existing PRC foreign exchange regulations,
payments of current account items, including profit distributions, interest payments and expenditures from the transaction, can
be made in foreign currencies without prior approval from the PRC State Administration of Foreign Exchange (“SAFE”)
by complying with certain procedural requirements. However, approval from appropriate governmental authorities is required where
RMB is to be converted into foreign currency and remitted out of the PRC to pay capital expenses such as the repayment of bank
loans denominated in foreign currencies.

The
PRC government also may at its discretion restrict access in the future to foreign currencies for current account transactions.
If the foreign exchange control system prevents us from obtaining sufficient foreign currency to satisfy our currency demands,
we may not be able to pay certain of our expenses as they come due.

The
fluctuation of RMB may materially and adversely affect our common stock.

The
value of the RMB against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in
the PRC’s political and economic conditions. As we rely entirely on revenues earned in the PRC, any significant revaluation of
RMB may materially and adversely affect our cash flows, revenues and financial condition. For example, to the extent that we need
to convert U.S. dollars we receive from an offering of our securities into RMB for our operations, appreciation of the RMB against
the U.S. dollar could lead the RMB equivalent of the U.S. dollars be reduced and could have a material adverse effect on our business,
financial condition and results of operations. Conversely, if we decide to convert our RMB into U.S. dollars for making dividend
payments on our common stock or for other business purposes and the U.S. dollar appreciates against the RMB, the U.S. dollar equivalent
of the RMB we convert would be reduced. In August 2015, China’s currency dropped by a cumulative 4.4% against the U.S. dollar
on hopes of boosting the domestic economy, making Chinese exports cheaper and imports into China more expensive by that amount.
The effect on trade can be substantial. In addition, the depreciation of significant U.S. dollar denominated assets could result
in a charge to our income statement and a reduction in the value of these assets.

SAFE
promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment
and Financing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular 37, on July 4, 2014, which replaced
the former circular commonly known as “SAFE Circular 75” promulgated by SAFE on October 21, 2005. SAFE Circular 37
(the “SAFE Notice”) requires PRC residents to register with local branches of SAFE regarding their direct establishment
or indirect control of an offshore entity, for overseas investment and financing, with such PRC residents’ legally owned
assets or equity interests in domestic enterprises or offshore assets or interests, referred to in SAFE Circular 37 as a “special
purpose vehicle” (the “SPV”). SAFE Circular 37 further requires amendment to the registration in the event of
any significant changes with respect to the special purpose vehicle, such as increase or decrease of capital contributed by PRC
individuals, share transfer or exchange, merger, division or other material event. Under the SAFE Notice, failure to comply with
the registration procedures set forth above could result in liability under Chinese law for foreign exchange evasion and may result
in penalties and legal sanctions, including fines, the imposition of restrictions on a Chinese subsidiary’s foreign exchange
activities and its ability to distribute dividends to the SPV, its ability to pay the SPV proceeds from any reduction in capital,
share transfer or liquidation in respect of the Chinese subsidiary and the SPV’s ability to contribute additional capital
into or provide loans to the Chinese subsidiary. After consultation with China counsel, we do not believe that any of our PRC
domestic resident stockholders are subject to the SAFE registration requirement. However, we cannot provide any assurances that
all our stockholders who are PRC residents will not be required to make or obtain any applicable registrations or approvals required
by these SAFE regulations in the future. The failure or inability of our PRC resident stockholders to comply with the registration
procedures set forth therein may subject us to fines and legal sanctions, restrict our cross-border investment activities, or
limit our PRC subsidiaries’ ability to distribute dividends or obtain foreign-exchange-dominated loans to our company.

26

As
it is uncertain how the SAFE regulations will be interpreted or implemented, we cannot predict how these regulations will affect
our business operations or future strategy. For example, we may be subject to more stringent review and approval process with
respect to our foreign exchange activities, such as remittance of dividends and foreign-currency-denominated borrowings, which
may adversely affect our results of operations and financial condition. In addition, if we decide to acquire a PRC domestic company,
we cannot assure you that we or the owners of such company will be able to obtain the necessary approvals or complete the necessary
filings and registrations required by the SAFE regulations. This may restrict our ability to implement our acquisition strategy
and could adversely affect our business and prospects.

We
may be subject to fines and legal sanctions by SAFE or other PRC government authorities if we or our employees who are PRC citizens
fail to comply with PRC regulations relating to employee stock options granted by offshore listed companies to PRC citizens.

On
March 28, 2007, SAFE promulgated the Operating Procedures for Foreign Exchange Administration of Domestic Individuals Participating
in Employee Stock Ownership Plans and Stock Option Plans of Offshore Listed Companies, or Circular 78. Under Circular 78, Chinese
citizens who are granted share options by an offshore listed company are required, through a Chinese agent or Chinese subsidiary
of the offshore listed company, to register with SAFE and complete certain other procedures, including applications for foreign
exchange purchase quotas and opening special bank accounts. We and our Chinese employees who have been granted share options are
subject to Circular 78. Failure to comply with these regulations may subject us or our Chinese employees to fines and legal sanctions
imposed by SAFE or other PRC government authorities and may prevent us from further granting options under our share incentive
plans to our employees. Such events could adversely affect our business operations.

Our
business and financial performance may be materially adversely affected if the PRC regulatory authorities determine that our acquisition
of Jinong constitutes a Round-trip Investment without the PRC Ministry of Commerce (“MOFCOM”) approval.

On
August 8, 2006, six PRC regulatory agencies promulgated the Regulation on Merger and Acquisition of Domestic Companies by Foreign
Investors (the “2006 M&A Rules”), which became effective on September 8, 2006. According to the 2006 M&A Rules,
a “Round-trip Investment” is defined as having taken place when a PRC business that is owned, directly or indirectly,
by PRC individual(s) is sold to a non-PRC entity that is established or controlled, directly or indirectly, by those same PRC
individual(s) and their PRC affiliates. Under the 2006 M&A Rules, any Round-trip Investment must be approved by the MOFCOM.
The application of the 2006 M&A Rules with respect to the definition of Round-trip Investment remains unclear with no consensus
currently existing among the leading PRC law firms regarding the definition, scope of the applicability of the MOFCOM approval.

We,
through Green New Jersey, acquired 100% capital stock of Jinong (the “Jinong Acquisition”), Jinong was a PRC business
whose stockholders were two PRC individuals and a PRC entity, of which Mr. Tao Li, our current Chairman and CEO, was the controlling
stockholder, holding 31% of its shares. The PRC regulatory authorities may take the view that the Jinong Acquisition could be
part of a Round-trip Investment. The PRC legal counsel of Jinong has opinioned that the Jinong Acquisition did not violate any
PRC law, which would include the 2006 M&A Rules. We, however, cannot be assured you that the PRC regulatory authorities, MOFCOM,
may take the same view as the PRC legal counsel. If the PRC regulatory authorities take the view that the Jinong Acquisition constitutes
a Round-trip Investment under the 2006 M&A Rules, we cannot be assured that we may be able to obtain the approval required
from MOFCOM.

If
the PRC regulatory authorities take the view that the Jinong Acquisition constitutes a Round-trip Investment without MOFCOM approval,
they could invalidate our acquisition and ownership of Jinong. Additionally, the PRC regulatory authorities may take the view
that the Jinong Acquisition constitutes a transaction which requires the prior approval of the China Securities Regulatory Commission,
or CSRC, before MOFCOM approval is obtained. We believe that if this takes place, we may be able to find a way to re-establish
control of Jinong’s business operations through a series of contractual arrangements rather than an outright purchase of
Jinong. We cannot assure you that such contractual arrangements will be protected by PRC law or that we can receive as complete
or effective economic benefit and overall control of Jinong’s business than if the Company had direct ownership of Jinong.
In addition, we cannot assure you that such contractual arrangements can be successfully effected under PRC law. If we cannot
obtain MOFCOM or CSRC approval if required by the PRC regulatory authorities to do so, and if we cannot put in place or enforce
relevant contractual arrangements as an alternative and equivalent means of control of Jinong, our corporate structure the control
asserted by the shareholders in the United States will be materially adversely affected.

Jinong’s
contractual arrangements with Yuxing may result in adverse tax consequences to us.

We
could face material and adverse tax consequences if the PRC tax authorities determine that Jinong’s contractual arrangements
with Yuxing were not made on an arm’s length basis and adjust our income and expenses for PRC tax purposes in the form of
a transfer pricing adjustment. A transfer pricing adjustment could result in a reduction, for PRC tax purposes, of adjustments
recorded by Yuxing, which could adversely affect us by increasing Yuxing’s tax liability without reducing Jinong’s
tax liability, which could further result in late payment fees and other penalties to Yuxing for underpaid taxes.

27

We
control Yuxing through contractual arrangements which may not be as effective in providing control over Yuxing as direct ownership,
and if Yuxing or its shareholders breach the contractual arrangements, we would have to rely on legal remedies under PRC law,
which may not be available or effective, to enforce or protect our rights.

Effective
June 16, 2013, we conduct substantially all our operations on agriculture products, and generate substantially all our revenues
from agriculture products, through contractual arrangements with our VIE, Yuxing, that provide us, through our ownership of Green
New Jersey and its ownership of Jinong, with effective control over Yuxing. We have no direct ownership interest in Yuxing. We
depend on Yuxing to hold and maintain agriculture products contracts with our customers. Yuxing also owns substantially all our
property, facilities and other assets relating to the operation of our agriculture products business, and employs the personnel
for substantially all our agriculture products business. Neither our company nor Jinong has any ownership interest in Yuxing.
Although we believe that that each contract under Jinong’s contractual arrangements with Yuxing is valid, binding and enforceable
under current PRC laws and regulations in effect, these contractual arrangements may not be as effective in providing us with
control over Yuxing as direct ownership of Yuxing would be. In addition, Yuxing may breach the contractual arrangements. For example,
Yuxing may decide not to make contractual payments to Jinong, and consequently to our company, in accordance with the existing
contractual arrangements. In the event of any such breach, we would have to rely on legal remedies under PRC law. These remedies
may not always be available or effective, particularly considering uncertainties in the PRC legal system.

Yuxing
may also seek to renew its agreements on terms that are disadvantageous to us. Although we have entered into a series of agreements
that provide us with substantial ability to control Yuxing, we may not succeed in enforcing our rights under them insofar as our
contractual rights and legal remedies under PRC law are inadequate. If we are unable to renew these agreements on favorable terms
when these agreements expire or enter into similar agreements with other parties, our business may not be able to operate or expand,
and our operating expenses may significantly increase.

In
addition, although we do not rely on Yuxing’s revenue, Yuxing’s VIE structure is subject to uncertainty amid the PRC’s
changing legislative practice. In January 2015, China’s Ministry of Commerce unveiled a draft legislation that could change
how the government is regulating corporate structures, especially for VIEs controlled by foreign investments. Instead of looking
at “ownership”, the draft law focused on the entities or individuals hold control of a VIE. If a VIE is deemed to
be controlled by foreign investors, it may be barred from operating in restricted sectors or the prohibited sectors listed on
a “negative list”, where only companies controlled by Chinese nationals could operate, even if structured as VIEs.

If
the draft law is implemented in any form, and that the Company’s business was characterized as one of the “restricted”
or “prohibited” sectors, Yuxing may be barred from operation which will materially adversely affect our business.

PRC
laws and regulations governing our businesses and the validity of certain of our contractual arrangements are uncertain. If we
are found to be in violation of such PRC laws and regulations, we could be subject to sanctions. In addition, changes in such
PRC laws and regulations may materially and adversely affect our business.

There
are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited
to, the laws and regulations governing our business, or the enforcement and performance of Yuxing’s contractual arrangements
with Jinong. Jinong is considered a foreign invested enterprise under PRC law. As a result, Jinong is subject to PRC law limitations
on its businesses and foreign ownership of Chinese companies. These laws and regulations are relatively new and may be subject
to change, and their official interpretation and enforcement may involve substantial uncertainty. The effectiveness of newly enacted
laws, regulations or amendments may be delayed, resulting in detrimental reliance by foreign investors. New laws and regulations
that affect existing and proposed future businesses may also be applied retroactively.

The
PRC government has broad discretion in dealing with violations of laws and regulations, including levying fines, revoking business
and other licenses and requiring actions necessary for compliance. Licenses and permits issued or granted to us by relevant governmental
bodies may be revoked later by higher regulatory bodies. We cannot predict the effect of the interpretation of existing or new
PRC laws or regulations on our businesses. We cannot assure you that our current ownership and operating structure would not be
found in violation of any current or future PRC laws or regulations. As a result, we may be subject to sanctions, including fines,
and could be required to restructure our operations or cease to provide certain services. In addition, any litigation in China
may be protracted and result in substantial costs and diversion of resources and management attention. Any of these or similar
actions could significantly disrupt our business operations or restrict us from conducting a substantial portion of our business
operations, which could materially and adversely affect our business, financial condition and results of operations.

28

The
PRC environmental laws and regulations may adversely impact on our business.

Our
manufacturing operations are subject to numerous environmental laws, ordinances and regulations. These laws, ordinances and regulations
address and regulate, among other matters, wastewater discharge, air quality and the generation, handling, storage, treatment,
disposal and transportation of solid and hazardous waste. It is possible that compliance with a new regulatory requirement could
impose significant compliance costs on us. Such costs could have a material adverse effect on our business, financial condition
and results of operations.

We
believe that we have obtained all permits, licenses and approvals, and filed all registrations required for the conduct of our
business, except where the failure to obtain such permit, license or approval, or file any registration would not have a material
adverse effect on our business, financial condition and results of operations. We have not been notified by any governmental authority
of any continuing noncompliance, liability or other claim relating to any of our properties or business operations, nor are we
aware of any other material environmental condition with respect to any of our properties or arising out of our business operations
at any other location.

However,
no assurance can be given that all potential environmental liabilities have been identified or properly quantified or that any
prior owner, operator, or tenant has not created an environmental condition unknown to us. Moreover, no assurance can be given
that (i) future laws, ordinances or regulations will not impose any material environmental liability or (ii) the current
environmental condition of the properties will not be affected by the condition of land or operations near the properties (such
as the presence of underground storage tanks), or by third parties unrelated to us.

PRC
regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the
proceeds we received from any offerings to make loans to our PRC subsidiaries or to make additional capital contributions to our
PRC subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business.

We
are a holding company in the United States conducting our operations in China through our PRC subsidiaries. In utilizing the proceeds,
we received from any offerings, we may make loans to our PRC subsidiaries, whether currently in existence or to be formed in the
future, or make additional capital contributions to our PRC subsidiaries.

Any
loans we make to our PRC subsidiaries cannot exceed statutory limits and must be registered with SAFE, or its local counterparts.
Under applicable PRC law, the government authorities must approve a foreign-invested enterprise’s registered capital amount,
which represents the total amount of capital contributions made by the stockholders that have registered with the registration
authorities. In addition, the authorities must also approve the foreign-invested enterprise’s total investment, which is
equal to the company’s registered capital plus the amount of stockholder loans it is permitted to borrow under the law.
The ratio of registered capital to total investment cannot be lower than the minimum statutory requirement. If we make loans to
our operating subsidiaries in China that does not exceed its current maximum amount of borrowings, we will have to register each
loan with SAFE or its local counterpart for the issuance of a registration certificate of foreign debts. In practice, it could
be time-consuming to complete such SAFE registration process. Alternatively, or concurrently with the loans, we might make capital
contributions to our operating subsidiaries in China and such capital contributions involve uncertainties of their own. Further,
SAFE promulgated a new circular (known as Circular 142) in August 2008 with respect to the administration of conversion of foreign
exchange capital contributions of a foreign invested enterprise. The circular clarifies that RMB converted from foreign exchange
capital contributions can only be used for the activities within the approved business scope of such foreign invested enterprise
and cannot be used for domestic equity investments unless otherwise permitted.

While
we do not foresee this to happen soon, with respect to future loans by us to our PRC subsidiaries or with respect to future capital
contributions by us to our PRC subsidiaries, we cannot be assured that we will be able to complete the necessary government registrations
or obtain the necessary government approvals on a timely basis, if at all, when the need arises. If circumstances call and if
we fail to complete such registrations or obtain such approvals, our ability to use the proceeds we receive from this offering
and to capitalize or otherwise fund our PRC operations may be negatively affected, which could adversely and materially affect
our ability to fund and expand our business.

29

If
we were to be deemed as a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income
at the rate of 25% under the Enterprise Income Tax Law (“2008 EIT Law”) in the PRC and our non-PRC shareholders could
be subject to certain PRC taxes.

Under
the 2008 EIT Law and the implementing rules, both of which became effective January 1, 2008, an enterprise established outside
of the PRC with “de facto management bodies” within the PRC may be considered a PRC “resident enterprise”
and will be subject to the enterprise income tax at the rate of 25% on its global income as well as PRC enterprise income tax
reporting obligations. The implementing rules of the 2008 EIT Law define “de facto management” as “substantial
and overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise.
If we were to be considered a “resident enterprise” by the PRC tax authorities, our global income would be taxable
under the 2008 EIT Law at the rate of 25% and, to the extent we were to generate a substantial amount of income outside of PRC
in the future, we would be subject to additional taxes. In addition, the dividends we pay to our non-PRC enterprise shareholders
and gains derived by such shareholders from the transfer of our shares may also be subject to PRC withholding tax at the rate
up to 10%, if such income were regarded as China-sourced income. In addition, the circular mentioned above details that certain
Chinese-invested enterprises controlled by Chinese enterprises or Chinese group enterprises will be classified as “resident
enterprises” if the following are located or resident in China: senior management personnel and departments that are responsible
for daily production, operation and management; financial and personnel decision making bodies; key properties, accounting books,
company seal, and minutes of board meetings and stockholders’ meetings; and half or more of the directors with voting rights
or senior management. However, as of the date hereof, no final interpretation on the implementation of the “resident enterprise”
designation is available. Moreover, any such designation, when made by PRC tax authorities, will be determined based on the facts
and circumstances of individual cases. As a result, we cannot determine the likelihood or consequences of our being designated
a “resident enterprise” as of the date hereof.

If
the PRC tax authorities determine that we are a “resident enterprise,” we may be subject to enterprise income tax
at a rate of 25% on our worldwide income and dividends paid by us to our non-PRC stockholders as well as capital gains recognized
by them with respect to the sale of our stock may be subject to a PRC withholding tax. This will have an impact on our effective
tax rate, a material adverse effect on our net income and results of operations, and may require us to withhold tax on our non-PRC
stockholders.

Because
our principal assets are located outside of the United States and because almost all our directors and officers reside outside
of the United States, it may be difficult for you to use the United States Federal securities laws to enforce your rights against
us and our officers and most of our directors or to enforce judgments of United States courts against us or most of our directors
and officers in the PRC.

Almost
all our present officers and directors reside outside of the United States. In addition, our operating subsidiaries are in the
PRC and substantially all their assets are located outside of the United States. It may therefore be difficult for investors in
the United States to enforce their legal rights based on the civil liability provisions of the United States Federal securities
laws against us and our officers and most of our directors in the courts of either the United States or the PRC and, even if civil
judgments are obtained in courts of the United States, to enforce such judgments in PRC courts. It is unclear if extradition treaties
now in effect between the United States and the PRC would permit effective enforcement against us or most of our directors and
officers of criminal penalties, under the United States Federal securities laws or otherwise. In addition, enforcement of a foreign
judgment in the PRC may be limited or otherwise affected by applicable bankruptcy, insolvency, liquidation, arrangement, moratorium
or similar laws relating to or affecting creditors’ rights generally and will be subject to a statutory limitation of time
within which proceedings may be brought.

Failure
to comply with the U.S. Foreign Corrupt Practices Act could subject us to penalties and other adverse consequences.

We
are required to comply with the United States Foreign Corrupt Practices Act, which generally prohibits United States companies
from engaging in bribery or other prohibited payments to foreign officials for obtaining or retaining business. Foreign companies,
including some that may compete with us, are not subject to these prohibitions, and therefore may have a competitive advantage
over us. Corruption, extortion, bribery, pay-offs, theft and other fraudulent practices may occur in the PRC. If our competitors
engage in these practices they may receive preferential treatment, giving our competitors an advantage in securing business, which
would put us at a disadvantage. We can make no assurance that our employees or other agents will not engage in such conduct for
which we might be held responsible. If our employees or other agents are found to have engaged in such practices, we could suffer
severe penalties and other consequences that may have a material adverse effect on our business, financial condition and results
of operations.

We
may have difficulty managing the risk associated with doing business in the Chinese fertilizer and agricultural products sectors.

In
general, the fertilizer and agricultural products sectors in China is affected by a series of factors, including, but not limited
to, natural, economic and social such as climate, market, technology, regulation, and globalization, which makes risk management
difficult. Fertilizer and agricultural products operations in China face similar risks as present in other countries, however,
in the PRC these can either be mitigated or exacerbated due to governmental intervention through policy promulgation and implementation
either in the fertilizer and agricultural products or sectors which provide critical inputs to fertilizer and agricultural products
such as energy or outputs such as transportation. While not an exhaustive list, the following factors could significantly affect
our ability to do business:

input
and output pricing due to market factors and regulatory policies;

●

production
and crop progress due to adverse weather conditions, equipment deliveries, and water and irrigation conditions; and

●

infrastructure
conditions and policies.

Currently,
we do not hold and do not intend to purchase insurance policies to protect revenue in the case that the above conditions cause
losses of revenue.

Risks
Related to an Investment in our Stock.

We
may not pay any cash dividends in the foreseeable future.

We
paid a cash dividend on January 30, 2015 to stockholders of record as of the close of business on the record date of October 31,
2014. However, we may not anticipate paying cash dividends on our common stock in the foreseeable future and we may not have sufficient
funds legally available to pay dividends. Even if the funds are legally available for distribution, we may nevertheless decide
not to pay, or may be unable to pay, any dividends. We intend to retain all earnings for our company’s operations.

The
market price for our common stock may be volatile and subject to wide fluctuations, which may adversely affect the price at which
you can sell our shares.

The
market price for our common stock may be volatile and subject to wide fluctuations in response to factors including the following:

filing
of a class action lawsuit against us and certain of our current and former officers;

●

changes
in financial estimates by securities research analysts;

●

conditions
in foreign or domestic fertilizer and agricultural markets;

●

changes
in the economic performance or market valuations of other companies in the same industry;

●

announcements
by us or our competitors of new products, acquisitions, strategic partnerships, joint ventures or capital commitments;

●

addition
or departure of key personnel;

●

fluctuations
of exchange rates between the RMB and the U.S. dollar;

●

intellectual
property litigation;

●

general
economic or political conditions in the PRC; and

●

Other
events or factors, many of which are beyond our control.

31

In
addition, the securities market has from time to time experienced significant price and volume fluctuations that are not related
to the operating performance of companies. These market fluctuations may also materially and adversely affect the market price
of our stock, regardless of our actual operating performance.

We
may require additional financing in the future and our operations could be curtailed if we are unable to obtain required additional
financing when needed.

We
may need to obtain additional equity or debt financing to fund future capital expenditures. Additional equity may result in dilution
to the holders of our outstanding shares of capital stock. Additional debt financing may include conditions that would restrict
our freedom to operate our business, such as conditions that:

●

limit
our ability to pay dividends or require us to seek consent for the payment of dividends;

●

increase
our vulnerability to general adverse economic and industry conditions;

●

require
us to dedicate a portion of our cash flow from operations to payments on our debt, thereby reducing the availability of our
cash flow to fund capital expenditures, working capital and other general corporate purposes; and

●

limit
our flexibility in planning for, or reacting to, changes in our business and our industry.

We
cannot guarantee that we will be able to obtain any additional financing on terms that are acceptable to us, or at all.

A
SEC investor bulletin regarding reverse mergers may drive down the market price of our common stock.

On
June 9, 2011, the SEC issued an investor bulletin in which it explained the process by which a company becomes a public company
by means of a reverse merger, described the potential risks of investing in a reverse merger company and detailed recent enforcement
actions taken by it against certain reverse merger companies. The investor bulletin raised specific concerns with respect to foreign
companies that access the U.S. markets through the reverse merger process, as we did. The SEC investor bulletin could lead investors
in our common stock to sell their shares and may cause other investors not to invest in us, thus driving down the market price
of our common stock or making it more difficult for us to raise funds in the future.

Stockholders
should have no expectation of any dividends in the future.

We
paid a cash dividend on January 30, 2015 to stockholders of record as of the close of business on the record date of October 31,
2014. However, the Board of Directors may not intend to declare any dividends on our common stock soon, but instead intends to
retain all earnings, if any, for use in the operation and expansion of our business. If we decide to pay dividends, foreign exchange
and other regulations in China may restrict our ability to distribute retained earnings from China or convert those payments from
Renminbi into foreign currencies.

If
our common stock were delisted and determined to be a “penny stock,” a broker-dealer may find it more difficult to
trade our common stock and an investor may find it more difficult to acquire or dispose of our common stock in the secondary market.

If
our common stock were removed from listing with the New York Stock Exchange, it may be subject to the so-called “penny stock”
rules. The SEC has adopted regulations that define a “penny stock” to be any equity security that has a market price
per share of less than $5.00, subject to certain exceptions, such as any securities listed on a national securities exchange.
For any transaction involving a “penny stock,” unless exempt, the rules impose additional sales practice requirements
on broker-dealers, subject to certain exceptions. If our common stock were delisted and determined to be a “penny stock,”
a broker-dealer may find it more difficult to trade our common stock and an investor may find it more difficult to acquire or
dispose of our common stock on the secondary market. Investors in penny stocks should be prepared for the possibility that they
may lose their whole investment.

32

Item
1B.

Unresolved
Staff Comments

Not
applicable.

Item
2.

Properties

There
is no private ownership of land in China. All land is owned by the PRC government on behalf of all Chinese citizens or collectively
owned by farmers. Land use rights can be granted or transferred with or without consideration upon approval by the PRC State Land
Administration Bureau or its authorized branches.

Our
principal executive offices are located at Third floor, Borough A, Block A. No. 181, South Taibai Road, Xi’an, Shaanxi Province,
PRC 710065. The office space is approximately 360 square meters (3,875 square feet). It is leased from Xi’an Kingtone Information
Technology Co., Ltd. (“Kingtone Information”), for a term of two years from July 1, 2016 at monthly rent of RMB25,723
(approximately $43,884) for 612 square meters (approximately 6,588 square feet) of office space.

Through
Jinong, we own an approximately 6,495 square meters (69,911 square feet) production facility that manufactures liquid fertilizer
products and a 13,803-square meter (148,576 square feet) production facility that produces liquid and highly concentrated (powdered)
fertilizers, located in the Yang Ling Agriculture High-Tech Demonstration Zone, on No. 6 Guhua 5 Road, Yangling, Xi’an,
Shaanxi province, PRC 712100. The production facilities occupy approximately 30,947 square meters (333,111 square feet) of land,
which contains office buildings, warehouses and research laboratories. The production lines have a total annual production capacity
of 55,000 metric tons. We own the land use rights for the land Jinong’s manufacturing facilities are situated for a term
of 50 years from 2001.

Yuxing,
Jinong’s wholly-owned subsidiary, has land use rights to over 353,000 square meters (3,799,660 square feet) of land located
in Hu County, Xi’an, Shaanxi Province on which we have built 98 sunlight greenhouses and 6 intelligent greenhouses as part
of a research and development center currently under construction. Yuxing owns the land use rights to the property for a term
of 50 years from 2009.

Through
Gufeng and Tianjuyuan, we own an additional 17,930 square meters (approximately 192,997 square feet) of manufacturing, office
and warehouse space and 47,110 square meters (approximately 507,088 square feet) of auxiliary facilities of the building located
on approximately 42,726 square meters (459,898 square feet) of land located in No. 6 Mafang Logistics Park, Pinggu, Beijing. In
addition, the eight manufacturing facilities of Gufeng and Tianjuyuan collectively increased our total annual production capacity
by another 500,000 metric tons.

Tianjuyuan
leases approximately 47,333 square meters (509,488 square feet) of land in the Ping Gu District of Beijing. Under the lease dated
February 16, 2004 with the village committee of Dong Gao Village and Zhen Nan Zhang Dai Village in the Beijing Ping Gu District,
Tianjuyuan leases the land at an annual rent of RMB 35,500 (approximately $5,361). The lease term is from February 1, 2004 to
January 31, 2054. While the lease was recognized previously by our PRC counsel as invalid and unenforceable due to its permitted
use, we have since obtained the proper land use right certificate from the relevant government entity.

33

The
details on our properties and manufacturing facilities are described in the table below:

(1)
As of June 30, 2018, the encumbrances over our land use right and building ownership are summarized as below:

Interest

Contract

Type
of

Rate

Property
under

No.

Loan
Amount

Lending
Institution

Period

Guarantee

(Per Annum)

Mortgage

1

RMB
10 million

Bank
of Beijing-

May
22, 2018-

Mortgage

5.22

%

Tianjuyuan’s
land

($1,510,000)

Pinggu
Branch

May 21, 2019

2

RMB
20million

Postal
Saving Bank of China-

Jun 19, 2018-

Mortgage

6.31

%

Tianjuyuan’s
land

($3,020,000)

Pinggu
Branch

Jun 18, 2019

Item
3.

Legal
Proceedings

There
are no actions, suits, proceedings, inquiries or investigation before or by any court, public board, government agency, self-regulatory
organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened
against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers
or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

We have two authorized classes of equity
securities: (i) common stock, par value $0.001 per share, 38,896,945 shares of which were outstanding as of October 19, 2018,
and (ii) preferred stock, par value $0.001 per share, of which no shares were outstanding as of October 19, 2018. Since December
7, 2009, our common stock has been listed and traded on the NYSE under the symbol “CGA”. From March 9, 2009 to December
4, 2009, our common stock was listed and traded on the NYSE MKT, formerly known as NYSE Amex Equities. From August 27, 2007 until
March 9, 2009, our common stock was traded on the Over-the-Counter Bulletin Board.

Our common stock is traded
on the New York Stock Exchange (“NYSE”) under the symbol “CGA”. The following table shows the range of
high and low closing sales prices for each quarter within the last two fiscal years as reported on the NYSE:

Quarter Ended

High

Low

09/30/2016

$

1.46

$

1.37

12/31/2016

$

1.46

$

1.20

03/31/2017

$

1.43

$

1.20

06/30/2017

$

1.33

$

1.22

09/30/2017

$

1.24

$

1.23

12/31/2017

$

1.25

$

1.23

03/31/2018

$

1.28

$

1.25

06/30/2018

$

1.17

$

1.14

Holders

As of October 19, 2018, there were approximately
484 shareholders of record of our common stock. This does not reflect the number of persons or entities who held stock in nominee
or “street” name through various brokerage firms.

Dividends

Our
board of directors has not declared a dividend on our common stock during the last two fiscal years or the subsequent interim
period due to our business expansion and integration in the last two fiscal years and in the subsequent interim period.

The
payment of dividends, if any, is at the discretion of the Board of Directors and is contingent on the Company’s revenues
and earnings, capital requirements, financial conditions and the ability of our operating subsidiaries to obtain approval to send
money out of the PRC. The PRC’s national currency, the Yuan or RMB, is not a freely convertible currency. Please read “
Our subsidiaries are subject to restrictions on paying dividends and making other payments to our subsidiary, Green New Jersey;
as a result, we might therefore, be unable to pay dividends to you. ” under Item 1A “Risk Factors” of this
Report.

Securities
Authorized for Issuance Under Equity Compensation Plans

On
October 27, 2009, our Board of Directors (the “Board”) adopted the Company’s 2009 Equity Incentive Plan (the
“Incentive Plan”). On December 11, 2009, our stockholders approved the Incentive Plan. The Incentive Plan gives us
the ability to grant stock options, stock appreciation rights (SARs), restricted stock and other stock-based awards to our employees,
consultants and to non-employee members of our advisory board or our Board or the board of directors of any of our subsidiaries.
On October 3, 2012, October 25, 2013 and May 15, 2015, our Board approved the amendment to increase the shares covered by the
Incentive Plan by three million shares. All three amendments were approved by our stockholders on the annual meetings held on
December 15, 2012, December 22, 2013, and June 30, 2015, respectively. As a result, a total of 11.26 million shares of Common
Stock have been reserved under the Incentive Plan.

As
of June 30, 2018, there was no outstanding options to purchase shares of common stock granted under the Plan. Options granted
in the future under the Incentive Plan are within the discretion of our Board or our compensation committee, as delegated by the
Board. The following table summarizes the number of shares of our Common Stock authorized for issuance under our Incentive Plan
as of June 30, 2018.

35

Equity
Compensation Plan Information

Number of securities remaining

available for

Number of

future

securities to

issuance

be issued

Weighted-

under

upon

average

equity

exercise

exercise

compensation

of

price of

plans

outstanding

outstanding

(excluding

options,

options,

securities

warrants

warrants

reflected in

and rights

and rights

column

Plan category

(a)

(b)

(a))(c)

Equity compensation plans approved by security holders

—

$

—

1,272,935

Equity compensation plans not approved by security holders

—

—

—

Total

—

$

—

1,272,935

Performance
Graph

The
following graph compares the cumulative total return on our common stock, the NYSE Composite Index and a peer group index consisting
of companies reporting under the S&P 500 Fertilizers & Agricultural Chemicals Sub Industry Index over the period commencing
on June 30, 2012 and ending on June 30, 2018.

The
performance graph in this Item 5 is not deemed to be “soliciting material” or to be “filed” with the Commission
or subject to Regulation 14A or 14C under the Exchange Act or to the liabilities of Section 18 of the Exchange Act, and will not
be deemed to be incorporated by reference into any filings under the Securities Act or the Exchange Act, whether made before or
after the date of this Report and irrespective of any general incorporation language in such filings.

36

Recent
Sales of Unregistered Securities; Use of Proceeds from Unregistered Securities.

There
was no unregistered sale of the Company’s equity securities during the fiscal year ended June 30, 2018, that were not otherwise
disclosed in a Quarterly Report on Form 10-Q or a Current Report on Form 8-K.

Issuer
Purchases of Equity Securities

There
was no purchase of equity securities by the Company during the fiscal year ended June 30, 2018, that were not otherwise disclosed
in a Quarterly Report on Form 10-Q or a Current Report on Form 8-K.

Item
6.

Selected
Financial Data

The
following selected consolidated income statement data for the years ended June 30, 2018, 2017 and 2016 and the selected consolidated
balance sheet data as of June 30, 2018 and 2017 have been derived from our audited consolidated financial statements included
elsewhere in this Annual Report on Form 10-K. These consolidated financial data should be read in conjunction with “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements and related notes
included elsewhere in this Report. Our selected consolidated income statement data for the year ended June 30, 2015 and the selected
consolidated balance sheet data as of June 30, 2015 and 2014 have been derived from our audited financial statements which are
not included in this Report. The historical results presented below are not necessarily indicative of the results that may be
expected in any future period.

As of June 30,

2018

2017

2016

2015

2014

Revenue

$

287,053,530

$

277,848,486

$

268,785,020

$

263,354,288

$

233,402,088

Cost of goods sold

212,944,597

195,133,306

175,755,689

159,398,386

142,203,315

Gross profit

74,108,933

82,715,180

93,029,331

103,955,902

91,198,773

Operating expenses

44,307,146

51,194,568

60,437,412

62,242,978

55,881,113

Income from operations

29,801,787

31,520,612

32,591,919

41,712,924

35,317,660

Non-operating income (expense)

(921,279

)

(308,186

)

(515,759

)

(1,350,983

)

(1,742,019

)

Provision for income taxes

35,852,127

6,511,880

7,371,967

8,916,815

8,060,946

Net income

$

(6,931,225

)

$

25,152,154

$

24,704,193

$

31,445,126

$

25,514,695

Weighted average shares outstanding:

Basic

38,631,765

38,093,028

36,703,576

33,983,698

31,403,001

Diluted

38,631,765

38,093,028

36,703,576

33,983,698

31,403,001

Earnings (loss) per share:

Basic

$

(0.18

)

$

0.66

$

0.67

$

0.93

$

0.81

Diluted

$

(0.18

)

$

0.66

$

0.67

$

0.93

$

0.81

As of June 30,

2018

2017

2016

2015

2014

Total current assets

$

407,426,651

$

370,954,462

$

335,581,234

$

304,184,346

$

228,212,666

Total assets

482,985,960

455,681,630

418,782,527

429,582,618

393,110,210

Total current liabilities

83,066,274

49,718,115

48,298,195

56,633,144

61,070,418

Total liabilities

90,438,173

58,153,576

48,298,195

56,633,144

61,070,418

Total stockholders’ equity

$

392,547,787

$

397,528,054

$

370,484,332

$

372,949,474

$

332,039,792

37

Item
7.

Management’s
Discussion and Analysis of Financial Condition and Results of Operations.

The
following discussion and analysis of our financial condition and results of operations should be read in conjunction with our
consolidated financial statements and the notes to those financial statements appearing elsewhere in this report. This discussion
and analysis contains forward-looking statements that involve significant risks and uncertainties. As a result of many factors,
such as the slow-down of the macro-economic environment in China and its impact on economic growth in general, the competition
in the fertilizer industry and the impact of such competition on pricing, revenues and margins, the weather conditions in the
areas where our customers are based, the cost of attracting and retaining highly skilled personnel, the prospects for future acquisitions,
and the factors set forth elsewhere in this report, our actual results may differ materially from those anticipated in these forward-looking
statements. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained
in this report will in fact occur. You should not place undue reliance on the forward-looking statements contained in this report.

The
forward-looking statements speak only as of the date on which they are made, and, except to the extent required by U.S. federal
securities laws, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the
date on which the statement is made or to reflect the occurrence of unanticipated events. Further, the information about
our intentions contained in this report is a statement of our intention as of the date of this report and is based upon, among
other things, the existing regulatory environment, industry conditions, market conditions and prices, and our assumptions as of
such date. We may change our intentions, at any time and without notice, based upon any changes in such factors, in our assumptions
or otherwise.

Unless
the context indicates otherwise, as used in the notes to the financial statements of the Company, the following are the references
herein of all the subsidiaries of the Company (i) Green Agriculture Holding Corporation (“Green New Jersey”), a wholly-owned
subsidiary of Green Nevada incorporated in the State of New Jersey; (ii) Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd.
(“Jinong”), a wholly-owned subsidiary of Green New Jersey organized under the laws of the PRC; (iii) Xi’an Hu
County Yuxing Agriculture Technology Development Co., Ltd. (“Yuxing”), a Variable Interest Entity in the PRC (“VIE”)
controlled by Jinong through contractual agreements; (iv) Shaanxi Lishijie Agrochemical Co., Ltd. (“Lishijie”), a
VIE controlled by Jinong through contractual agreements; (v) Songyuan Jinyangguang Sannong Service Co., Ltd. (“Jinyangguang”),
a VIE in the PRC controlled by Jinong through contractual agreements; (vi) Weinan City Linwei District Wangtian Agricultural Materials
Co., Ltd. (“Wangtian”), a VIE controlled by Jinong through contractual agreements; (vii) Aksu Xindeguo Agricultural
Materials Co., Ltd. (“Xindeguo”), a VIE controlled by Jinong through contractual agreements; (vii) Xinjiang Xinyulei
Eco-agriculture Science and Technology Co., Ltd (“Xinyulei”), a VIE controlled by Jinong through contractual agreements;
(ix) Sunwu County Xiangrong Agricultural Materials Co., Ltd. (“Xiangrong”), a VIE controlled by Jinong through contractual
agreements; (x) Anhui Fengnong Seed Co., Ltd. (“Fengnong”), a VIE controlled by Jinong through contractual agreements;
(xi) Beijing Gufeng Chemical Products Co., Ltd., a wholly-owned subsidiary of Jinong in the PRC (“Gufeng”); and (xii)
Beijing Tianjuyuan Fertilizer Co., Ltd., Gufeng’s wholly-owned subsidiary in the PRC (“Tianjuyuan”). Yuxing,
Lishijie, Jinyangguang, Wangtian, Xindeguo, Xinyulei, Xiangrong and Fengnong may also collectively be referred to as the “the
VIE Companies”; Lishijie, Jinyangguang, Wangtian, Xindeguo, Xinyulei, Xiangrong and Fengnong may also collectively be referred
to as “the sales VIEs” or “the sales VIE companies”.

Unless
the context otherwise requires, all references to (i) “PRC” and “China” are to the People’s Republic
of China; (ii) “U.S. dollar,” “$” and “US$” are to United States dollars; and (iii) “RMB”,
“Yuan” and Renminbi are to the currency of the PRC or China.

Overview

We
are engaged in the research, development, production and sale of various types of fertilizers and agricultural products in the
PRC through our wholly-owned Chinese subsidiaries, Jinong and Gufeng (including Gufeng’s subsidiary Tianjuyuan), and our
VIE, Yuxing. Our primary business is fertilizer products, specifically humic-acid based compound fertilizer produced by Jinong
and compound fertilizer, blended fertilizer, organic compound fertilizer, slow-release fertilizer, highly-concentrated water-soluble
fertilizer and mixed organic-inorganic compound fertilizer produced by Gufeng. In addition, through Yuxing, we develop and produce
various agricultural products, such as top-grade fruits, vegetables, flowers and colored seedlings. For financial reporting purposes,
our operations are organized into three business segments: fertilizer products (Jinong), fertilizer products (Gufeng) and agricultural
products (Yuxing).

The
fertilizer business conducted by Jinong and Gufeng generated approximately 73.1% and 74.0% of our total revenues for the years
ended June 30, 2018 and 2017, respectively. The sales VIEs generated 23.2% and 23.0% of our revenues for the years ended June
30, 2018 and 2017, respectively. Yuxing serves as a research and development base for our fertilizer products.

38

Fertilizer
Products

As
of June 30, 2018, we had developed, produced, and sold a total of 726 different fertilizer products in use, of which 142 were
developed and produced by Jinong, 333 by Gufeng, and 251 by the VIE companies.

Below
is a table that shows the metric tons of fertilizer sold by Jinong and Gufeng and the revenue per ton for the periods indicated:

Year Ended June 30,

Change 2017 to 2018

2018

2017

Amount

%

(metric tons)

Jinong

47,487

51,506

(4,019

)

(7.8

)%

Gufeng

308,098

309,882

(1,784

)

(0.6

)%

355,584

361,388

(5,804

)

(1.6

)%

Year Ended June 30,

2018

2017

(revenue per tons)

Jinong

$

2,123

2,070

Gufeng

377

337

For
the fiscal year ended June 30, 2018, we sold approximately 355,584 metric tons of fertilizer products, as compared to 361,388
metric tons for the fiscal year ended June 30, 2017. For the fiscal year ended June 30, 2018, Jinong sold approximately 47,487
metric tons of fertilizer products, as compared to 51,506 metric tons for the fiscal year ended June 30, 2017. For the fiscal
year ended June 30, 2018, Gufeng sold approximately 308,098 metric tons of fertilizer products, as compared to 309,882 metric
tons for the fiscal year ended June 30, 2017.

As
of June 30, 2018, we had a total of 1,959 distributors covering 22 provinces, 4 autonomous regions and 4 central government-controlled
municipalities in China. Jinong had 1,145 distributors in China. Jinong’s sales are not dependent on any single distributor
or any group of distributors. Jinong’s top five distributors accounted for 2.6% of its fertilizer revenues for the fiscal
year ended June 30, 2018. Gufeng had 316 distributors, including some large state-owned enterprises. Gufeng’s top five distributors
accounted for 74.5% of its revenues for the fiscal year ended June 30, 2018.

Agricultural
Products

Through
Yuxing, we develop, produce and sell high-quality flowers, green vegetables and fruits to local marketplaces and various horticulture
and planting companies. We also use certain of Yuxing’s greenhouse facilities to conduct research and development activities
for our fertilizer products. The three PRC provinces that accounted for 78.4% of our agricultural products revenue for the fiscal
year ended June 30, 2018 were Shaanxi (60.4%), Tianjin (11.2%) and Sichuan (6.8%).

Recent
Developments

New
products and distributors

During
the three months ended June 30, 2018, Jinong launched 2 new fertilizer products. Jinong also added 6 new distributors for the
three months ended June 30, 2018. During the three months ended June 30, 2018, Gufeng did not launch any new fertilizer but added
1 new distributor.

39

Strategic
Acquisitions

On
June 30, 2016 and January 1, 2017, through Jinong, we entered into (i) Strategic Acquisition Agreements (the “SAA”),
and (ii) Agreements for Convertible Notes (the “ACN”), with the shareholders of the companies as identified below
(the “Targets”).

The exchange rate
between RMB and U.S. dollars on June 30, 2016 is RMB1=US$0.1508, according to the exchange rate published by Bank of China.

(2)

On November 30,
2017, the Company, through its wholly-owned subsidiary Jinong, discontinued the strategic acquisition agreements and the series
of contractual agreements with the shareholders of Zhenbai. In return, the shareholders of Zhenbai agreed to tender the whole
payment consideration in the SAA back to the Company with early termination penalties. The convertible notes paid to Zhenbai’s
shareholders and the accrued interest has been forfeited.

The
exchange rate between RMB and U.S. dollars on January 1, 2017 is RMB1=US$0.144, according to the exchange rate published by
Bank of China.

Pursuant
to the SAA and the ACN, the shareholders of the Targets, while retaining possession of the equity interests and continuing to
be the legal owners of such interests, agreed to pledge and entrust all of their equity interests, including the proceeds thereof
but excluding any claims or encumbrances, and the operations and management of its business to Jinong, in exchange of an aggregate
amount of RMB45,000,000 (approximately $6,731,600) to be paid by Jinong within three days following the execution of the SAA,
ACN and the VIE Agreements, and convertible notes with an aggregate face value of RMB 63,000,000 (approximately $9,418,800) with
an annual fixed compound interest rate of 3% and term of three years.

Jinong
acquired the Targets using the VIE arrangement based on our need to further develop our business and comply with the regulatory
requirements under the PRC laws.

As
our business focuses on the production of fertilizer, all our business activities intertwine with those in the agriculture industry
in China. Specifically, we deal with compliance, regulation, safety, inspection, and licenses in fertilizer production, farm land
use and transfer, growing and distribution of agriculture goods, agriculture basic supplies, seeds, pesticides, and trades of
grains. It is an industry in which heavy regulations get implemented and strictly enforced. In addition, E-commerce, which is
also under strict government regulation in the PRC, has lately become a sales and distribution channel for agricultural products.
Currently, we are developing an online platform to connect the physical distribution network we either own or lease.

Compared
with the regulatory environment in other jurisdictions, the regulatory environment in the PRC is unique. For example, the “M&A
Rules” purports to require that an offshore special purpose vehicle controlled directly or indirectly by PRC companies or
individuals and formed for purposes of overseas listing through acquisition of PRC domestic interests held by such PRC companies
or individuals obtain the approval of the China Securities Regulatory Commission (the “CSRC”) prior to the listing
and trading of such special purpose vehicle’s securities on an overseas stock exchange. On September 21, 2006, the CSRC
published procedures regarding its approval of overseas listings by special purpose vehicles.

For
both e-commerce and agriculture industries, PRC regulators limit the investment from foreign entities and set particularly rules
for foreign-owned entities to conduct business. We expect these limitations on foreign-owned entities will continue to exist in
e-commerce and agriculture industries. The VIE arrangement, however, provides feasibility for obtaining administrative approval
process and avoiding industry restrictions that can be imposed on an entity that is a wholly-owned subsidiary of a foreign entity.
The VIE agreements reduce uncertainty and the current limitation risk. It is our understanding that the VIE agreements, as well
as the control we obtained through VIE arrangement, are valid and enforceable. Such legal structure does not violate the known,
published, and current PRC laws. While there are substantial uncertainties regarding the interpretation and application of PRC
Laws and future PRC laws and regulations, and there can be no assurance that the PRC authorities will take a view that is not
contrary to or otherwise different from our belief and understanding stated above, we believe the substantial difficulty that
we experienced previously to conduct business in agriculture as a foreign ownership can be greatly reduced by the VIE arrangement.
Further, as an integral part of the VIE arrangement, the underlying equity pledge agreements provide legal protection for the
control we obtained. Pursuant to the equity pledge agreements, we have completed the equity pledge processes with the Targets
to ensure the complete control of the interests in the Targets. The shareholders of the Targets are not entitled to transfer any
shares to a third party under the exclusive option agreements. If necessary, they may transfer shares to our company without consideration.

41

While
the VIE arrangement provides us with the feasibility to conduct our business in the E-Commerce and agriculture industries, validity
and enforceability of VIE arrangement is subject to (i) any applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or similar laws affecting creditors’ rights generally, (ii) possible judicial or administrative actions or any
PRC Laws affecting creditors’ rights, (iii) certain equitable, legal or statutory principles affecting the validity and
enforceability of contractual rights generally under concepts of public interest, interests of the State, national security, reasonableness,
good faith and fair dealing, and applicable statutes of limitation; (iv) any circumstance in connection with formulation, execution
or implementation of any legal documents that would be deemed materially mistaken, clearly unconscionable, fraudulent, coercive
at the conclusions thereof; and (v) judicial discretion with respect to the availability of indemnifications, remedies or defenses,
the calculation of damages, the entitlement to attorney’s fees and other costs, and the waiver of immunity from jurisdiction
of any court or from legal process. Validity and enforceability of VIE arrangement is also subject to risk derived from the discretion
of any competent PRC legislative, administrative or judicial bodies in exercising their authority in the PRC. As a result, there
can no assurance that any of such PRC Laws will not be changed, amended or replaced in the immediate future or in the longer term
with or without retrospective effect.

Results
of Operations

Fiscal
Year ended June 30, 2018 Compared to the Year ended June 30, 2017.

FOR
THE YEARS ENDED JUNE 30

2018

2017

Change$

Change%

Sales

Jinong

97,722,842

106,642,032

(8,919,190

)

-8.4

%

Gufeng

112,983,573

104,446,239

8,537,334

8.2

%

Yuxing

10,485,030

8,517,231

1,967,799

23.1

%

Sales VIEs

65,862,085

58,242,984

7,619,101

13.1

%

Net sales

287,053,530

277,848,486

9,205,044

3.3

%

Cost of goods sold

Jinong

48,209,038

48,056,379

152,659

0.3

%

Gufeng

98,485,737

89,913,446

8,572,291

9.5

%

Yuxing

8,752,977

6,872,878

1,880,099

27.4

%

Sales VIEs

57,496,845

50,290,603

7,206,242

14.3

%

Cost of goods sold

212,944,597

195,133,306

17,811,291

9.1

%

Gross profit

74,108,933

82,715,180

(8,606,247

)

-10.4

%

Operating expenses

Selling expenses

19,812,492

32,218,579

(12,406,087

)

-38.5

%

Selling expenses - amortization of deferred asset

General and administrative expenses

24,494,654

18,975,989

5,518,664

29.1

%

Total operating expenses

44,307,146

51,194,568

(6,887,423

)

-13.5

%

Income from operations

29,801,787

31,520,612

(1,718,824

)

-5.5

%

Other income (expense)

Other income (expense)

(499,861

)

(82,186

)

(417,675

)

508.2

%

Discontinued VIE operation - Zhenbai

(331,995

)

0

(331,995

)

Interest income

502,730

318,404

184,326

57.9

%

Interest expense

(592,153

)

(544,404

)

(47,749

)

8.8

%

Total other income (expense)

(921,279

)

(308,186

)

(613,093

)

198.9

%

Income before income taxes

28,880,508

31,212,426

(2,331,918

)

-7.5

%

Provision for income taxes

35,852,127

6,511,880

29,340,247

450.6

%

Net income from continuing operations

(6,971,619

)

24,700,546

(31,672,165

)

-128.2

%

Total (Loss)Income from discontinued operations, net of tax

40,394

451,608

(411,214

)

-91.1

%

Net income

(6,931,225

)

25,152,154

(32,083,379

)

-127.6

%

Other comprehensive income (loss)

Foreign currency translation gain (loss)

1,529,229

568,944

960,285

168.8

%

Comprehensive income (loss)

(5,401,996

)

25,721,098

(31,123,094

)

-121.0

%

Basic weighted average shares outstanding

38,631,765

38,093,028

538,737

1.4

%

Basic net earnings per share – from continuing operations

-0.18

0.65

-0.83

-127.8

%

Basic net earnings per share – from discontinued operations

0.00

0.01

-0.01

-91.2

%

Basic net earnings per share

-0.18

0.66

-0.834

-127.2

%

Diluted weighted average shares outstanding

38,631,765

38,093,028

538,737

1.4

%

Diluted net earnings per share– from continuing operations

-0.18

0.65

-0.83

-127.8

%

Diluted net earnings per share – from discontinued operations

0.00

0.01

-0.01

-91.2

%

Diluted net earnings per share

-0.18

0.66

-0.84

-127.2

%

42

Net Sales

Total net sales for the fiscal year ended
June 30, 2018 were $287,053,530, an increase of $9,205,044 or 3.3%, from $277,848,486 for the fiscal year ended June 30, 2017.
This increase was primarily due to an increase in Yuxing’s and Gufeng’s net sales.

For the fiscal year ended June 30, 2018,
Jinong’s net sales decreased $8,919,190, or 8.4%, to $97,722,842 from $106,642,032 for the fiscal year ended June 30, 2017.
This decrease was mainly attributable to the decrease in Jinong’s sales volume during the last fiscal year.

For the fiscal year ended June 30, 2018,
Gufeng’s net sales were $112,983,573, an increase of $8,537,334, or 8.2% from $104,446,239, for the fiscal year ended June
30, 2017. The increase was mainly attributable to the increase in Gufeng’s sales volume during the last fiscal year.

For the fiscal year ended June 30, 2018,
Yuxing’s net sales were $10,485,030, an increase of $1,967,799 or 23.1%, from $8,517,231 for the fiscal year ended June
30, 2017. The increase was mainly attributable to the increase in market demand during the last fiscal year.

For the fiscal year ended June 30, 2018,
VIEs’ net sales were $65,862,085, an increase of $7,619,101 or 13.1%, from $58,242,984 for the fiscal year ended June 30,
2017. The increase was mainly attributable to the increase in market demand during the last fiscal year.

Cost of Goods Sold

Total cost of goods sold for the fiscal
year ended June 30, 2018 was $212,944,597 an increase of $17,811,291, or 9.1%, from $195,133,306 for the fiscal year ended June
30, 2017. This increase was mainly due to increase in cost of goods sold in for Yuxing and Gufeng.

Cost of goods sold by Jinong for the fiscal
year ended June 30, 2018 was $48,209,038, a decrease of $152,659, or 0.3%, from $48,056,379, for the fiscal year ended June 30,
2017. The decrease in cost of goods was mainly due to the decrease in Jinong’s sales volume during the last fiscal year.

Cost of goods sold by Gufeng for the fiscal
year ended June 30, 2018 was $98,485,737, an increase of $8,572,291, or 9.5%, from $89,913,446, for the fiscal year ended June
30, 2017. This increase was primarily attributable to an increase in its sales volume during the last fiscal year.

For year ended June 30, 2018, cost of goods
sold by Yuxing was $8,752,977, an increase of $1,880,099, or 27.4%, from $6,872,878 for the fiscal year ended June 30, 2017. This
increase was mainly due to the increase in Yuxing’s net sales during the last fiscal year.

Cost of goods sold by the sales VIEs for
the fiscal year ended June 30, 2018 was $57,496,845, an increase of $7,206,242, or 14.3%, from $50,290,603 for the three months
ended June 30, 2018. This increase was primarily attributable to the more products sold during the last fiscal year.

Gross Profit

Total gross profit for the fiscal year
ended June 30, 2018 decreased by $8,606,247 to $74,108,933, as compared to $82,715,180 for the fiscal year ended June 30, 2017.
Gross profit margin was 25.8% and 29.8% for the fiscal years ended June 30, 2018 and 2017, respectively.

Gross profit generated by Jinong decreased
by $9,071,849, or 15.5%, to $49,513,804 for the fiscal year ended June 30, 2018 from $58,585,653 for the fiscal year ended June
30, 2017. Gross profit margin from Jinong’s sales was approximately 50.7% and 54.9% for the fiscal years ended June 30, 2018
and 2017, respectively. The decrease in gross profit margin was mainly due to the increase in product costs and the decrease in
sales prices.

For the fiscal year ended June 30, 2018,
gross profit generated by Gufeng was $14,497,836, a decrease of $34,957, or 0.2%, from $14,532,793 for the fiscal year ended June
30, 2017. Gross profit margin from Gufeng’s sales was approximately 12.8% and 13.9% for the fiscal years ended June 30, 2018
and 2017, respectively. The decrease in gross profit margin was mainly due to the slightly increase in product costs.

For the fiscal year ended June 30, 2018,
gross profit generated by Yuxing was $1,732,053, an increase of $87,700, or 5.3% from $1,644,353 for the fiscal year ended June
30, 2017. The gross profit margin was approximately 16.5% and 19.3% for the fiscal years ended June 30, 2018 and 2017, respectively.
The decrease in gross profit percentage was mainly due to the increase in product costs and the decrease in sales prices.

Gross profit generated by VIEs increased
by $412,859, or 5.2%, to $8,365,240 for the fiscal year ended June 30, 2018 from $7,952,381 for the fiscal year ended June 30,
2017. Gross profit margin from VIE’s sales was approximately 12.7% and 13.7% for the fiscal year ended June 30, 2018 and
2017, respectively.

43

Selling Expenses

Our selling
expenses consisted primarily of salaries of sales personnel, advertising and promotion expenses, freight-out costs and
related compensation. Selling expenses were $19,812,492, or 6.9%, of net sales for the fiscal year ended June 30, 2018, as
compared to $32,218,579, or 11.6% of net sales for the fiscal year ended June 30, 2017, a decrease of $12,406,087, or 38.5%.
The selling expenses of Jinong for the fiscal year ended June 30, 2018 were $18,105,659 or 18.5% of Jinong’s net sales,
as compared to selling expenses of $16,029,940 or 15.0% of Jinong’s net sales for the fiscal year ended June 30, 2017.
The increase in Jinong’s selling expenses was due to Jinong’s further expanded marketing efforts, which led to
the increase in shipping costs and packaging cost. The selling expenses of Yuxing were $43,249 or 0.4% of Yuxing’s net
sales for the fiscal year ended June 30, 2018, as compared to $43,168 or 0.5% of Yuxing’s net sales for the fiscal year
ended June 30, 2017. The selling expenses of Gufeng were $481,665 or 0.4% of Gufeng’s net sales for the fiscal year
ended June 30, 2018, as compared to $420,433 or 0.4% of Gufeng’s net sales for the fiscal year ended June 30, 2017. The
selling expenses of VIEs were $1,181,918, or 1.8%, of VIEs’ net sales for the fiscal year ended June 30, 2018, as
compared to $1,117,566, or 1.9%, of VIEs’ net sales for the fiscal year ended June 30, 2017.

Selling Expenses
– amortization of deferred assets

Our selling expenses
- amortization of our deferred assets were 0 for the fiscal year ended June 30, 2018, as compared to $14,564,305, or 5.1% of net
sales for the fiscal year ended June 30, 2017, a decrease of $$14,564,305, or 100%. This decrease was due to the fact that all
of the deferred assets were fully amortized and therefore no amortization was recorded on the fully amortized assets for the fiscal
year ended June 30, 2018.

General and Administrative Expenses

General and administrative expenses consisted
primarily of related salaries, rental expenses, business development, depreciation and travel expenses incurred by our general
and administrative departments and legal and professional expenses, including expenses incurred and accrued for certain litigation.
General and administrative expenses were $24,494,654, or 8.5% of net sales for the fiscal year ended June 30, 2018, as compared
to $18,975,989, or 6.8%, of net sales for the fiscal year ended June 30, 2017, an increase of $5,518,664 or 29.1%. The increase
in general and administrative expenses was mainly due to the slightly increase in net sales during the last fiscal year.

Total Other Expenses

Total other expenses consisted of income
from subsidies received from the PRC government, interest income, interest expenses and bank charges. Total other expense for the
fiscal year ended June 30, 2018 was $921,279, as compared to $308,186 for the fiscal year ended June 30, 2017, an increase in expense
of $613,093, or 198.9%. The increase in total other expense partly resulted from an increase in accretion expense by $183,247 or
49.6%, to $552,648 during the year ended June 30, 2018 as compared to $369,401 during the year ended June 30, 2017. The increase
in total other expense also resulted from the increase for bank charges by $116,602 or 621.2%, to $135,373 during the year ended
June 30, 2018 as compared to $18,771 during the year ended June 30, 2017.

Income
Taxes

Jinong
is subject to a preferred tax rate of 15% because of its business being classified as a High-Tech project under the PRC Enterprise
Income Tax Law (“EIT”) that became effective on January 1, 2008. Jinong incurred income tax expenses of $ 3,501,354
for the fiscal year ended June 30, 2018, as compared to $3,521,978 for the fiscal year ended June 30, 2017, a decrease of $20,624
or 0.6%.

Gufeng
is subject to a tax rate of 25%, and incurred income tax expenses of $2,471,593 for the fiscal year ended June 30, 2018, as compared
to $2,148,326 for the fiscal year ended June 30, 2017, an increase of $323,267, or 15.0%.

Yuxing
has no income tax for the years ended June 30, 2018 and 2017 because of being exempted from paying income tax due to its products
falling into the tax exemption list set out in the EIT.

Net Income (Loss)

Net income (loss) for the fiscal year ended
June 30, 2018 was $(6,931,225), a decrease of $32,083,379, or 127.6%, compared to $25,152,154 for the fiscal year ended June 30,
2017. The decrease was mainly attributable to the estimated net charge of $29,010,535 related to the repatriation tax. Net income
(loss) as a percentage of total net sales was approximately (2.4)% and 8.8% for the fiscal year ended June 30, 2018 and 2017, respectively.

Discussion
of Segment Profitability Measures

As
of June 30, 2018, we were engaged in the following businesses: the production and sale of fertilizers through Jinong and Gufeng,
the production and sale of high-quality agricultural products by Yuxing, and the sales of agriculture materials by the sales VIEs.
For financial reporting purpose, our operations were organized into four main business segments based on locations and products:
Jinong (fertilizer production), Gufeng (fertilizer production) and Yuxing (agricultural products production) and the sales VIEs.
Each of the segments has its own annual budget about development, production and sales.

44

Each
of the four operating segments referenced above has separate and distinct general ledgers. The chief operating decision maker
(“CODM”) makes decisions with respect to resources allocation and performance assessment upon receiving financial
information, including revenue, gross margin, operating income and net income produced from the various general ledger systems;
however, net income by segment is the principal benchmark to measure profit or loss adopted by the CODM.

For Jinong, net income increased 6.1%,
by $1,141,115 to $19,841,004 for the year ended June 30, 2018, from $18,699,889 for the fiscal year ended June 30, 2017. The difference
was due to the decrease in operating expense.

For Gufeng, net income increased by $727,858
or 11.3% to $7,172,837 for the year ended June 30, 2018 from $6,444,979 for year ended June 30, 2017. The difference was due to
the increase in net sales.

For Yuxing, net loss increased 79.6%, by
$1,891,563, to $(484,398) for the year ended June 30, 2018 from $-2,375,961 for year ended June 30, 2017. The difference was mainly
due to the decrease for general and administrative expense.

For
the sales VIEs, the net income was $2,447,534 for year ended June 30, 2018, decreased by $104,925 or 4.1%, from $2,552,459 for
year ended June 30, 2017. The decrease was mainly due to the increase in cost of goods sold for the sales VIEs.

Liquidity
and Capital Resources

Our
principal sources of liquidity include cash from operations, borrowings from local commercial banks and net proceeds of offerings
of our securities consummated in July 2009 and November/December 2009 (collectively the “Public Offerings”).

As
of June 30, 2018, cash and cash equivalents were $150,805,639, an increase of $27,774,102, or 22.6%, from $123,031,537 as of June
30, 2017.

We
intend to use some of the remaining net proceeds from the Public Offerings, as well as other working capital if required, to acquire
new businesses, upgrade production lines and complete Yuxing’s new greenhouse facilities for agriculture products located
on 88 acres of land in Hu County, 18 kilometers southeast of Xi’an city. Yuxing purchased a set of agricultural products
testing equipment for the year of 2016. We believe that we have sufficient cash on hand and positive projected cash flow from
operations to support our business growth for the next twelve months to the extent we do not have further significant acquisitions
or expansions. However, if events or circumstances occur and we do not meet our operating plan as expected, we may be required
to seek additional capital and/or to reduce certain discretionary spending, which could have a material adverse effect on our
ability to achieve our business objectives. Notwithstanding the foregoing, we may seek additional financing as necessary for expansion
purposes and when we believe market conditions are most advantageous, which may include additional debt and/or equity financings.
There can be no assurance that any additional financing will be available on acceptable terms, if at all. Any equity financing
may result in dilution to existing stockholders and any debt financing may include restrictive covenants.

The
following table sets forth a summary of our cash flows for the periods indicated:

Year Ended June 30,

2018

2017

Net cash provided by operating activities

$

28,137,537

$

21,713,964

Net cash provided by (used in) investing activities

(63,746

)

(5,813,506

)

Net cash provided by (used in) financing activities

(2,835,464

)

3,393,065

Effect of exchange rate change on cash and cash equivalents

2,535,774

860,540

Net increase (decrease) in cash and cash equivalents

27,774,102

20,154,063

Cash and cash equivalents, beginning balance

123,031,537

102,877,475

Cash and cash equivalents, ending balance

$

150,805,639

$

123,031,537

Operating
Activities

Net
cash provided by operating activities was $28,137,537 for the fiscal year ended June 30, 2018, a decrease of $6,423,573, or 29,6%
from cash provided by operating activities of $21,713,964 for the fiscal year ended June 30, 2017. The decrease was mainly attributable
to the increase in accounting receivable during the year ended June 30, 2018 as compared to the same period in 2017.

Investing
Activities

Net
cash used in investing activities for the fiscal year ended June 30, 2018 was $63,746, a decrease of $5,749,760, or 98.9% from
cash provided by investing activities of $5,813,506 for the fiscal year ended June 30, 2017. This decrease was mainly due to no
cash acquired with acquisitions in 2018.

45

Financing
Activities

Net cash used by financing activities for
the fiscal year ended June 30, 2018 was $2,835,464, an increase of $6,228,529 from cash provided in financing activities of $3,393,065
for the fiscal year ended June 30, 2017. During the year ended June 30, 2018, we received $3,129,812 from the proceeds from
loans compared to $5,948,021 of proceeds from loans for the fiscal year ended June 30, 2017. During the year ended June 30, 2018,
we repaid $6,179,300 loans compared to $3,154,956 of loans repayment for the fiscal year ended June 30, 2017.

As
of June 30, our loans payables were as follows:

2018

2017

Short term loans payable:

$

4,726,300

$

7,678,111

Total

$

4,726,300

$

7,678,111

Accounts
Receivable

We
had accounts receivable of $199,012,733 as of June 30, 2018, as compared to $141,665,179 as of June 30, 2017, an increase of $57,347,554
or 40.5%. As of June 30, 2018, Gufeng had accounts receivable of $102,113,316, an increase of $43,110,686 or 73.1%, compared to
$59,002,630 as of June 30, 2017. As of June 30, 2018, VIEs had accounts receivable of $ 45,953,939, an increase of $ 15,266,080
or 49.7%, compared to $30,687,859 as of June 30, 2017.

Allowance for doubtful accounts in account
receivable for the fiscal year ended June 30, 2018 was $24,551,796, an increase of $15,094,373 or 159.6% from $9,457,423 as of
June 30, 2017. And the allowance for doubtful accounts as a percentage of accounts receivable was 12.3% as of June 30, 2018 and
6.3% as of June 30, 2017.

Deferred
assets

We
had no deferred assets as of June 30, 2018, as compared to $864,070 as of June 30, 2017. During the twelve months, we assisted
the distributors in certain marketing efforts and developing standard stores to expand our competitive advantage and market shares.
Based on the distributor agreements, the amount owed by the distributors in certain marketing efforts and store development will
be expensed over three years if the distributors are actively selling our products. If a distributor defaults, breaches, or terminates
the agreement with us earlier than the contractual terms, the unamortized portion of the amount owed by the distributor is payable
to us immediately. The deferred assets had been fully amortized as of June 30, 2018.

Inventories

We
had inventories of $53,784,814 as of June 30, 2018, as compared to $78,013,891 as of June 30, 2017, a decrease of $24,229,077,
or 31.1%. The principal reason for the decrease is attributed to the decrease of Gufeng’s inventory. As of June 30,
2018, Gufeng’s inventory was $31,617,519, compared to $54,444,465 as of June 30, 2017, a decrease of 22,826,946, or 41.9%.

Advances
to Suppliers

We
had advances to suppliers of $25,194,463 as of June 30, 2018 as compared to $24,063,062 as of June 30, 2017, representing an increase
of $1,171,401 or 4.9%. Our inventory level may fluctuate from time to time, depending how fast the raw material is consumed and
replenished during the production process, and how fast the finished goods are sold. The replenishment of raw material relies on
the management’s estimate of numerous factors, including but not limited to, the raw materials future price, and spot price
along with their volatility, as well as the seasonal demand and future price of finished fertilizer products. Such estimate
may not be accurate, and the purchase decision of raw materials based on the estimate can cause excessive inventories in slow
sales and insufficient inventories in peak times.

Accounts
Payable

We
had accounts payable of $27,128,921 as of June 30, 2018 as compared to $19,643,897 as of June 30, 2017, representing an increase
of $7,485,024, or 38.1%. The increase was primarily due to the increase of accounts payable for VIEs. It has account payable of
$ 25,398,118 as of June 30, 2018 as compared to $18,355,921 as of last year, representing an increase of $7,042,197, or 38.4%.

46

Unearned
Revenue (Customer Deposit)

We
had unearned revenue of $7,251,967 as of June 30, 2018 as compared to $7,046,570 as of June 30, 2017, representing an increase
of $205,397, or 2.9%. The increase was mainly attributable to Gufeng’s $5,149,905 unearned revenue as of June 30, 2018,
compared to $3,478,713 unearned revenue during the same period last year, caused by the advancement of deposits made by client.
We expect to deliver products to our customers during the next three months at which time we will recognize the revenue.

Off-Balance
Sheet Arrangements

We
do not have any off-balance sheet arrangements.

Critical
Accounting Policies and Estimates

Management’s
discussion and analysis of its financial condition and results of operations are based upon our consolidated financial statements,
which have been prepared in accordance with United States generally accepted accounting principles. Our financial statements reflect
the selection and application of accounting policies which require management to make significant estimates and judgments. See
Note 2 to our consolidated financial statements, “Basis of Presentation and Summary of Significant Accounting Policies.”
We believe that the following paragraphs reflect the most critical accounting policies that currently affect our financial condition
and results of operations:

Use
of estimates

The
preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States
of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the amount of revenues
and expenses during the reporting periods. Management makes these estimates using the best information available at the time the
estimates are made. However, actual results could differ materially from those estimates.

Revenue
recognition

Sales
revenue is recognized at the date of shipment to customers when a formal arrangement exists, the price is fixed or determinable,
the delivery is completed, we have no other significant obligations and collectability is reasonably assured. Payments received
before all of the relevant criteria for revenue recognition are satisfied are recorded as unearned revenue.

Our
revenue consists of invoiced value of goods, net of a value-added tax (VAT). No product return or sales discount allowance is
made as products delivered and accepted by customers are normally not returnable and sales discounts are normally not granted
after products are delivered.

Cash
and cash equivalents

For
statement of cash flows purposes, we consider all cash on hand and in banks, certificates of deposit and other highly-liquid investments
with maturities of three months or less, when purchased, to be cash and cash equivalents.

Accounts
receivable

Our
policy is to maintain reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts
receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and
changes in customer payment patterns to evaluate the adequacy of these reserves. Any accounts receivable of Jinong and Gufeng
that are outstanding for more than 180 days will be accounted as allowance for bad debts, and any accounts receivable of Yuxing
that are outstanding for more than 90 days will be accounted as allowance for bad debts.

Assets
held for sale

Assets
held for sale represent certain equipment from our Jintai facility that has been relocated. The carrying amount of the assets
held for sale equals the fair value of the assets less disposal costs. These assets were sold prior to June 30, 2018.

47

Deferred
assets

Deferred
assets represent amounts the Company advanced to the distributors in their marketing and stores development to expand our competitive
advantage and market shares. Based on the distributor agreements, the amount owed by the distributors in certain marketing
efforts and store development will be expensed over three years if the distributors are actively selling our products. If a distributor
defaults, breaches, or terminates the agreement with us earlier than the realization of the contractual terms, the unamortized
portion of the amount owed by the distributor is to be refunded to us immediately. The deferred assets had been fully amortized
as of June30, 2018.

Segment
reporting

FASB
ASC 280 requires use of the “management approach” model for segment reporting. The management approach model is based
on the way a company’s management organizes segments within the company for making operating decisions and assessing performance.
Reportable segments are based on products and services, geography, legal structure, management structure, or any other way management
disaggregates a company.

As
of June 30, 2018, we were organized into ten main business units: Jinong (fertilizer production), Gufeng (fertilizer production),
Yuxing (agricultural products production), Lishijie (agriculture sales), Jinyangguang (agriculture sales), Wangtian (agriculture
sales), Xindeguo (agriculture sales), Xinyulei (agriculture sales), Fengnong (agriculture sales) and Xiangrong (agriculture sales).
For financial reporting purpose, our operations were organized into four main business segments based on locations and products:
Jinong (fertilizer production), Gufeng (fertilizer production) and Yuxing (agricultural products production) and the sales VIEs.
Each of the segments has its own annual budget regarding development, production and sales.

Item
7a.

Quantitative
and Qualitative Disclosures About Market Risks

Disclosures
about Market Risk

We
may be exposed to changes in financial market conditions in the normal course of business. Market risk generally represents the
risk that losses may occur as a result of movements in interest rates and equity prices. We currently do not, in the normal course
of business, use financial instruments that are subject to changes in financial market conditions.

Currency
Fluctuations and Foreign Currency Risk

Substantially
all of our revenues and expenses are denominated in RMB. However, we use the U.S. dollar for financial reporting purposes. Conversion
of RMB into foreign currencies is regulated by the People’s Bank of China through a unified floating exchange rate system.
Although the PRC government has stated its intention to support the value of RMB, there can be no assurance that such exchange
rate will not again become volatile or that RMB will not devalue significantly against U.S. dollar. Exchange rate fluctuations
may adversely affect the value, in U.S. dollar terms, of our net assets and income derived from our operations in the PRC.

Our
reporting currency is the U.S. dollar. Except for U.S. holding companies, all of our consolidated revenues, consolidated costs
and expenses, and our assets are denominated in RMB. As a result, we are exposed to foreign exchange risk as our revenues and
results of operations may be affected by fluctuations in the exchange rate between U.S. dollars and RMB. If RMB depreciates against
the U.S. dollar, the value of our RMB revenues, earnings and assets as expressed in our U.S. dollar financial statements will
decline. Assets and liabilities are translated at the exchange rates as of the balance sheet dates, revenues and expenses are
translated at the average exchange rates, and shareholders’ equity is translated at historical exchange rates. Any resulting
translation adjustments are not included in determining net income but are included in determining other comprehensive income,
a component of shareholders’ equity. As of June 30, 2018, our accumulated other comprehensive income was $(3.7) million.
We have not entered into any hedging transactions in an effort to reduce our exposure to foreign exchange risk. The value of RMB
against the U.S. dollar and other currencies is affected by, among other things, changes in the PRC’s political and economic
conditions. Between July 1, 2017 and June 30, 2018, China’s currency increased by a cumulative 2.3% against the U.S. dollar.
The effect on trade can be substantial. Moreover, it is possible that, in the future, PRC authorities may lift restrictions on
fluctuations in RMB exchange rate and lessen intervention in the foreign exchange market.

48

Interest
Rate Risk

We
deposit surplus funds with Chinese banks earning daily interest. We do not invest in any instruments for trading purposes. All
of our outstanding debt instruments carry fixed rates of interests. The amount of short-term debt outstanding as of June 30, 2018
and June 30, 2017 was $4.7 million and $7.7 million, respectively. We are exposed to interest rate risk primarily with respect
to our short-term bank loans. Although the interest rates, which are based on the banks’ prime rates with respect to our
short-term loans, are fixed for the terms of the loans, the terms are typically three to twelve months for short-term bank loans
and interest rates are subject to change upon renewal. There were no material changes in interest rates for short-term bank loans
renewed during the fiscal year ended June 30, 2018. The original loan term on average is one year, and the remaining average life
of the short term-loans is from one month to twelve months.

Management
monitors the banks’ prime rates in conjunction with our cash requirements to determine the appropriate level of debt balances
relative to other sources of funds. We have not entered into any hedging transactions in an effort to reduce our exposure to interest
rate risk.

Credit
Risk

We
have not experienced significant credit risk, as most of our customers are long-term customers with superior payment records.
Our receivables are monitored regularly by our credit managers.

Inflation
Risk

Inflationary
factors such as increases in the cost of our products and overhead costs may adversely affect our operating results. Although
we do not believe that inflation has had a material impact on our financial position or results of operations to date, a high
rate of inflation in the future may have an adverse effect on our ability to maintain current levels of gross margin and selling,
general and administrative expenses as a percentage of net revenues if the selling prices of our products do not increase with
these increased costs.

Item
8.

Financial
Statements and Supplementary Data

Balance sheets, as of June 30, 2018 and
2017, and statements of operations, stockholders’ equity and cash flows for each of the two years in the period ended June
30, 2018 and 2017, together with the related notes and the reports of our independent registered public accounting firms, are set
forth on the “F” pages of this report.

Item
9.

Changes
in and Disagreements with Accountants On Accounting and Financial Disclosure

Not
applicable.

Item
9A.

Controls
and Procedures

Disclosure
Controls and Procedures

Pursuant
to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), at the conclusion of the fiscal year ended
June 30, 2018 we carried out an evaluation, under the supervision and with the participation of our management, including our
Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls
and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange
Act”)). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of the end
of the period covered by this Report, our disclosure controls and procedures were effective and adequately designed to ensure
that the information required to be disclosed by us in the reports we submit under the Exchange Act is recorded, processed, summarized
and reported within the time periods specified in the applicable rules and forms and that such information was accumulated and
communicated to our Chief Executive Officer and Chief Financial Officer, in a manner that allowed for timely decisions regarding
required disclosure.

Management
Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal
control over financial reporting to provide reasonable assurance regarding the reliability of our financial reporting and the
preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Internal
control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that in
reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally
accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations
of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial
statements.

49

Any
system of internal control, no matter how well designed, has inherent limitations, including the possibility that a control can
be circumvented or overridden and misstatements due to error or fraud may occur and not be detected in a timely manner. Also,
because of changes in conditions, internal control effectiveness may vary over time. Accordingly, even an effective system of
internal control will provide only reasonable assurance with respect to financial statement preparation. In addition, the design
of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become
inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures. Therefore,
any current evaluation of controls cannot and should not be projected to future periods.

Management
assessed our internal control over financial reporting as of the year ended June 30, 2018. In making this assessment, management
used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission 2013 framework (COSO) in the
report entitled “Internal Control-Integrated Framework.” The COSO framework summarizes each of the components of a company’s
internal control system, including (i) the control environment, (ii) risk assessment, (iii) control activities, (iv) information
and communication, and (v) monitoring.

Based
on management’s assessment using the COSO criteria, management has concluded that the Company’s internal control over
financial reporting was effective as of June 30, 2018 to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external reporting purposes in accordance with U.S. generally accepted accounting
principles.

We
are not required to have our internal control over financial reporting as of June 30, 2018 audited by our auditors because we
are a smaller reporting company.

Changes
in Internal Control over Financial Reporting

There
were no changes in the Company’s internal control over financial reporting that occurred during our last fiscal quarter
ended June 30, 2018 that has materially affected or is reasonably likely to materially affect our internal control over financial
reporting.

Item
9B.

Other
Information

There
is no other information required to be disclosed under this item which was not previously disclosed.

50

PART
III

Item
10.

Directors,
Executive Officers and Corporate Governance

Set
forth below are the names of our directors, executive officers and significant employees of our company as of the date of this
Form 10-K, their ages, all positions and offices that they hold with us, the periods during which they have served as such, and
their business experience during at least the last five years.

Term as

Director of

Name

Position with the Company

Age

Company

Zhuoyu “Richard” Li

Chairman of the Board of Directors, Chief Executive Officer, President

27

2017 - Present

Yongcheng Yang

Chief Financial Officer

53

2017 - Present

Ale Fan

Director

38

2015 - Present

Daqing Zhu

Director

53

2017 - Present

Chairman of the Audit Committee

Compensation Committee Member

Nominating Committee Member

Lianfu Liu

Director

79

2007 - Present

Chairman of the Nominating Committee

Audit Committee Member

Compensation Committee Member

Jinjun Lu

Director

45

2017 - Present

Chairman of the Compensation Committee

Audit Committee Member

Nominating Committee Member

51

Name

Position
with the Company and Principal Occupations

Zhuoyu “Richard”
Li

Chairman of the
Board of Directors and Chief Executive Officer since 2017. Mr. Li was President of the Company until the death of his father,
Tao Li, in December 2017, at which time he was appointed to serve as Chairman of the Board of Directors and Chief Executive
Officer. Mr. Li has six years of experience in agricultural industry. Prior to joining the Company, Mr. Li has
served as Chief Operating Officer at the Company’s affiliate, 900LH.com Food Co., Ltd. (“900LH.com”) since
January 2016. From January 2015 to January 2016, Mr. Li served as a senior manager at the international department of 900LH.com,
where he helped to develop the international market. Richard served as a senior manager at the customer center of 900LH.com
from March 2013 through January 2015. He studied business at the University of Auckland in 2012. We believe Mr. Li’s
practical experience from serving as President of the Company and with 900LH.com qualify him to serve as Chairman of the Board
of Directors of the Company.

Yongcheng Yang

Chief
Financial Officer. Mr. Yang has served as the Chief Financial Officer of our company since 2017. He served as Senior Vice President
of Finance since January 2016. Before that, Mr. Yang served as the chief financial officer of the Company’s wholly-owned
subsidiary, Beijing Gufeng Chemical Products Co., Ltd. (“Gufeng”) since July 2010. Earlier, Mr. Yang had served various
senior, and executive level positions in finance for the Company and the Company’s affiliate, Xi’an Techteam Investment
Holding (Group) Co., Ltd, since 2002. Mr. Yang started his career in accounting and finance at Shaanxi Weidong Chemistry Co.,
Ltd from 1989 to 2002. Mr. Yang graduated from Xi’an Jiaotong University in 1989 with his Bachelor’s degree in accounting.

Ale Fan

Director.
Ms. Fan had served as a Director of our company since 2015 and a Director of Finance at Jinong since January 2013. Ms. Fan
had served as the deputy Director of Finance at Jinong since January 2013. She has also served as comptroller of the financial
department at Jinong from September 2007 to December 2012. Prior to that, she worked as an accountant at Jinong from August
2003. Ms. Fan holds a degree in Accounting from Baoji University of Arts and Sciences. We believe that Ms. Fan’s knowledge
of the Company’s history and day-to-day operations and her experience in accounting and finance in the PRC qualify her
to serve a director of our company.

Lianfu Liu

Director, Chairman
of Nominating Committee, Audit Committee Member and Compensation Committee Member. Mr. Liu has served as a director of our
company since December 26, 2007. Mr. Liu has served as the Chairman of the China Green Food Association since 1998. From 1992
to 1998, Mr. Liu was a Director and Senior Engineer for the China Green Food Development Center. Prior to that, Mr. Liu was
a Vice Director of the PRC Ministry of Agriculture. Mr. Liu graduated from Beijing Forestry University and studied soil conservation.
We believe Mr. Liu’s experience in the agricultural industry in the PRC allows him to bring a unique perspective as
an independent director of our company.

Daqing Zhu

Director, Chairman
of the Audit Committee, Compensation Committee Member and Nominating Committee Member. Mr. Zhu has served as the president
of Shaanxi Aisuo Consulting Co. Ltd., a company specializing in providing professional management and finance services, since
2014. In 2004, Mr. Zhu founded Shaanxi Xintianyou Auto Dealership Co. Ltd, a dealership of auto sales and services for various
brands, including BYD Auto, and had served as its CEO and Chairman of the Board until 2014. In addition to founding and developing
commercial businesses, Mr. Zhu had also worked in the public sector since the 1990s. His public administration experience
includes working at various agencies and offices of the Shaanxi provincial government from 1990 to 2004. Earlier in his career,
in the 1980’s, Mr. Zhu was a corporate banking officer at Industrial and Commercial Bank of China in Xi’an. As
the corporate leader with responsibility for all aspects of business management, Mr. Zhu has executive level experience in
financial management, internal control, marketing to individuals and small businesses, sales, customer care, operations, product
management, electronic commerce, financial services, executive compensation, strategic planning, technology, and mergers and
acquisitions.

Jinjun Lu

Director, Chairman
of Compensation Committee, Audit Committee Member and Nominating Committee Member. Mr. Lu, aged 44, is the co-founder of Shaanxi
Jinfenghui Technology Co. Ltd (“Jinfenghui”) since he started in 2014. Drawing on years of entrepreneurial experience,
Mr. Lu plans to grow Jinfenghui into one of the largest mobile terminal device manufacturers in northwestern China. At Jinfenghui,
Mr. Lu oversees corporate growth plans, budgets capital expenditures, seeks investment funds, and designs marketing strategies
for Jinfenghui products to penetrate target markets. Before founding Jinfenghui, in 1998 he founded Xinjiang Yongan Engineering
Co. Ltd in Xinjiang Uyghur Autonomous Region, a provincial-level autonomous region of China in the northwest of the country.
Earlier in the 1990s, Mr. Lu began his entrepreneurship career as a distributor for Lining-branded garment products in Henan
Province, which he grew into the largest wholesale venture for Lining in the region. As a founder of several enterprises and
a seasoned entrepreneur, Mr. Lu not only has executive experience in strategic management, marketing and sales, and technology,
but also brings his experience as a founder from different industries.

All
directors of our company hold office until the next annual meeting of our shareholders or until their successors have been elected
and qualified. The executive officers of our company are appointed by our board of directors and hold office until their death,
resignation or removal from office.

52

Family
Relationships

There
is no family relationship among any of our officers or directors.

Involvement
in Certain Legal Proceedings

To
the best of our knowledge, none of our directors or executive officers was involved in any legal proceedings during the last 10
years as described in Item 401(f) of Regulation S-K.

Section
16(a) Beneficial Ownership Reporting Compliance

Section
16(a) of the Exchange Act requires our executive officers and directors, and persons who own more than 10% of a registered class
of our equity securities (“Reporting Persons”), to file reports of ownership and changes in ownership with the SEC.
The Reporting Persons are also required to furnish us with copies of all such reports. Based solely on our review of the reports
received by us, we believe that, during the year ended June 30, 2018, our directors, executive officers and holders of ten percent
(10%) or more of our common stock complied with Section 16(a) filing requirements applicable to them.

Code
of Ethics

We
have adopted a Code of Ethics that applies to all our employees and officers, and the members of our Board of Directors, which
was amended and restated in 2010. The Amended and Restated Code of Ethics (the “Code of Ethics”) is available on our
website at www.cgagri.com. Printed copies are available upon request without charge. Any amendment to or waiver of the
Code of Ethics will be disclosed on our website promptly following the date of such amendment or waiver.

Corporate
Governance Guidelines

We
have adopted a Code of Ethics that applies to all our employees and officers, and the members of the Board, which was amended
and restated in 2010. The Amended and Restated Code of Ethics (the “Code of Ethics”) is available on our website at
www.cgagri.com. Printed copies are available upon request without charge. Any amendment to or waiver of the Code of Ethics
will be disclosed on our website promptly following the date of such amendment or waiver.

Audit
Committee

The
Audit Committee is responsible for: (i) overseeing the corporate accounting and financial reporting practices; (ii) recommending
the selection of our registered public accounting firm; (iii) reviewing the extent of non-audit services to be performed by the
auditors; and (iv) reviewing the disclosures made in our periodic financial reports. The members of the Audit Committee are Messrs.
Daqing Zhu, Lianfu Liu, and Jinjun Lu, each of whom is an independent director within the meaning of the rules of the NYSE and
Rule 10A-3 promulgated by the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In addition,
the Board has determined that Ms. Zhu qualifies as an Audit Committee Financial Expert under applicable SEC Rules. The Chairman
of the Audit Committee is Mr. Zhu. The Audit Committee held four meetings during the fiscal year ended June 30, 2018. The Audit
Committee carries out its responsibilities in accordance with the terms of its Audit Committee Charter, a copy of which was attached
as Annex A to our Definitive Proxy Statement on Schedule 14A for our 2010 Annual Meeting, filed with the SEC on October 28, 2010,
and is also available on our website at www.cgagri.com.

53

Compensation
Committee

The
Compensation Committee determines matters pertaining to the compensation of executive officers and other significant employees,
and administers our stock and incentive plans. The members of the Compensation Committee are Messrs. Jinjun Lu, Lianfu Liu and
Daqing Zhu. The Chairman of the Compensation Committee is Ms. Lu. The Compensation Committee held one meeting during the fiscal
year ended June 30, 2018. Each of the members of the Compensation Committee is a “non-employee director” within the
meaning of Rule 16b-3 under the Exchange Act, and an “outside director” within the meaning of Section 162(m) under
the Internal Revenue Code. The Compensation Committee carries out its responsibilities pursuant to a written charter, a copy of
which was attached as Annex C to our Definitive Proxy Statement on Schedule 14A for our 2009 annual meeting, filed with the SEC
on October 28, 2009, and is also available on our website at www.cgagri.com.

Nominating
Committee

The
Nominating Committee identifies and nominates candidates to serve on our Board. The members of the Nominating Committee are Messrs.
Jinjun Lu, Lianfu Liu and Daqing Zhu. The Chairman of the Nominating Committee is Mr. Lu. The Nominating Committee held one meeting
during the fiscal year ended June 30, 2018. A copy of our Nominating Committee Charter was attached as Annex B to our Definitive
Proxy Statement on Schedule 14A for our 2010 annual meeting, filed with the SEC on October 28, 2010, and is also available on
our website at www.cgagri.com. See “Director Nominations” below for the procedures for the nomination of directors.

Board
Leadership Structure and Board’s Role in the Oversight of Risk Management

Our
Board believes it is important to select our Chairman and our Chief Executive Officer in the manner it considers in the best interests
of our company at any given point in time. Due to Mr. Li and his family’s influence in the industry, our Board has determined
that the most effective leadership structure for our company is for Mr. Li to serve as both our Chairman and Chief Executive Officer.
Our Board benefits from the Chairman having direct knowledge of the operations of, and opportunities and challenges facing, our
business on a regular and company-wide basis. Mr. Li’s combined role as Chairman and Chief Executive Officer fosters greater
communication between the Board and management and provides unified leadership for carrying out our company’s strategic
initiatives and business plans.

To
counterbalance the potential for ineffective Board oversight, we have adopted a governance structure that includes: (i) a designated
lead independent director; (ii) annual elections of directors by most votes cast at the annual meeting of shareholders; (iii)
committees composed entirely of independent directors; and (iv) established corporate governance and ethics guidelines. Our Board
appointed Mr. Daqing Zhu to serve as the Board’s lead independent director. The lead independent director acts as an intermediary
between the Board and senior management. Among other things, the lead independent director is responsible for facilitating communication
among directors and between the Board and the Chief Executive Officer, working with the Chief Executive Officer to provide an
appropriate information flow to the Board, and chairing executive sessions of the independent directors. Executive sessions of
our independent directors occur following regularly scheduled quarterly audit committee meetings, and at such other times as the
independent directors deem appropriate. However, the Board recognizes that circumstances may change over time and as they do,
changes to the leadership structure may be warranted.

The
Board has an active role, directly and through its committees, in the oversight of our risk management efforts. The Board carries
out this oversight role through several levels of review. The Board regularly reviews and discusses with members of management
information regarding the management of risks inherent in the operations of our businesses and the implementation of our strategic
plan, including our risk mitigation efforts.

In
accordance with corporate governance standards of the NYSE, the Audit Committee charter assigns to that committee the responsibility
to review our policies and practices with respect to risk assessment and risk management, including major financial risk exposures,
and the steps management has taken to monitor and control such exposures. Additionally, each of the Board’s committees also
oversees the management of our risks that are under each committee’s areas of responsibility. For example, the Audit Committee
oversees management of accounting, auditing, external reporting, internal controls, and cash investment risks. The Nominating
Committee oversees our compliance policies, Code of Conduct, conflicts of interests, director independence and corporate governance
policies. The Compensation Committee oversees risks arising from compensation practices and policies. In this manner, the Board
can coordinate its risk oversight.

54

Director
Nominations

The
Nominating Committee recommends director candidates and will consider for such recommendation director candidates proposed by
management, other directors and stockholders. All director candidates will be evaluated based on the criteria identified below,
regardless of the identity of the individual or the entity or person who proposed the director candidate.

The
selection of director nominees includes consideration of factors deemed appropriate by the Corporate Governance and Nominating
Committee and the Board. We may engage a firm to assist in identifying, evaluating, and conducting due diligence on potential
board nominees. Factors will include integrity, achievements, judgment, intelligence, personal character, any prior contact or
relationship between a candidate and a current or former director or officer of our company, the interplay of the candidate’s
relevant experience with the experience of other Board members, the willingness of the candidate to devote adequate time to Board
duties and the likelihood that he or she will be willing and able to serve on the Board for a sustained period. The Corporate
Governance and Nominating Committee will consider the candidate’s independence, as defined by the rules of the SEC and the
NYSE. Relating to the selection, due consideration will be given to the Board’s overall balance of diversity of perspectives,
backgrounds, and experiences. Experience, knowledge, and skills to be represented on the Board include, among other considerations,
financial expertise (including an “audit committee financial expert” within the meaning of the SEC’s rules),
financing experience, related industry experience, strategic planning, business development, and community leadership.

Our
Board established the Compensation Committee to assist with the analysis and determination of the compensation structure for our
executive officers. Our Compensation Committee, consisting of three independent directors, reviews and approves, or in some cases
recommends for the approval of the full Board, the annual compensation for our executive officers. Typically, management recommends
to the Compensation Committee compensation package proposals based on prevailing compensation standards in our industry, which
in turn reviews and approves such proposals. Our Compensation Committee may consult with the executive officers to form consensus
on such packages. Our executive officers may discuss any disagreements and needed amendment to such proposals with our Compensation
Committee before such proposals are finalized and approved by the Compensation Committee.

Compensation
Objectives

Our
compensation objectives are as follows:

●

We strive to provide
competitive executive compensation programs that will help to attract highly qualified individual’s necessary for our
continued growth. Once an executive is hired, our goal is to retain and motivate them to achieve higher levels of performance
and be appropriately rewarded for that effort.

●

Compensation and
benefits are competitive with the local labor markets in which we compete, and focus also will be given to companies that
operate in the agriculture, feed, and fertilizer industries. Peer companies will typically have annual revenues that are one-half
to double that of us, for the purposes of compensation benchmarking.

●

We provide an executive
compensation package consisting of base salary, incentives (short term & long term), and benefits that are consistent
with similar positions at our recognized competitors. Each component addresses individual and company performance with a focus
on long-term profitable growth and shareholder return, competitive conditions, and our overall financial performance.

●

All compensation
programs are administered without regard to race, religion, national origin, color, sex, age, or disability, and adhere to
all local laws and regulations.

55

Elements
of Compensation

Base
Salary

Our
approach is to pay our executives a base salary that is competitive with those of other executive officers in similar positions
and with similar responsibilities in our peer group of competitive companies. We believe that a competitive base salary is a necessary
element of any compensation program that is designed to attract and retain talented and experienced executives. We also believe
that attractive base salaries can motivate and reward executives for their overall performance.

Stock-Based
Awards under the Equity Incentive Plan

In
addition to base salary, the other key component of executive compensation we provide to our Named Executive Officers is equity-based
compensation. In October 2009, our Board adopted our 2009 Equity Incentive Plan (the “Plan”), which was approved by
our shareholders at our annual shareholders meeting in December 2009 and amended in December 2012, December 2013 and June 2015.
The Plan gives us the ability to grant stock options, stock appreciation rights (SARs), restricted stock and other stock-based
awards to employees or consultants of our company or of any subsidiary of our company and to non-employee members of our advisory
board or our Board or the board of directors of any of our subsidiaries. The Board and the Compensation Committee believe the
ability to grant restricted stock, stock options and make other stock-based awards under the Plan is an important factor in attracting,
stimulating and retaining qualified and distinguished personnel with proven ability and vision to serve as employees, officers,
consultants or members of the Board or advisory board of our company and our subsidiaries, and to chart our course towards continued
growth and financial success.

During
the fiscal year ended June 30, 2017, effective December 30, 2016, the Compensation Committee granted (i) 400,000 shares of restricted
stock to Mr. Tao Li, then the Company’s CEO; (ii) 200,000 shares to Mr. Zhuoyu “Richard” Li, the Company’s
President, (iii) 200,000 shares to Mr. Ken Ren, then the Company’s Chief Financial Officer. Also, the Compensation Committee
granted 30,000 shares to Ms. Yiru Shi, 20,000 shares to Mr. Jianlei Shen and 20,000 shares to Mr. Lianfu Liu, each of whom was
then an independent director of the Company. The Stock Grants were vested immediately for then the CEO, CFO and the three independent
directors.

During
the fiscal year ended June 30, 2016, on June 29, 2016, the Company granted (i) 400,000 shares of restricted stock to Mr. Tao Li,
then the Company’s CEO; (ii) 200,000 shares of restricted stock to Mr. Ken Ren, then the CFO, and (iii) 30,000 shares of
restricted stock to Ms. Yiru Shi. Also, the Compensation Committee granted 20,000 shares of restricted stock to Mr. Jianlei Shen
and 20,000 shares of restricted stock to Mr. Lianfu Liu, each of whom was then an independent director of the Company. The Stock
Grants were vested immediately for then the CEO, CFO and the independent directors.

On
October 3, 2015, the Company granted an aggregate of 1,000,000 shares of restricted stock under the 2009 Plan to certain key employees.
The stock grants are subject to time-based vesting schedules, vesting in various installments until June 30, 2016. The value of
the restricted stock awards was $1,660,000 and is based on the fair value of the Company’s common stock on the grant date.

During
the fiscal year ended June 30, 2015, on September 30, 2014, the Company granted an aggregate of 1,750,000 shares of restricted
stock under the 2009 Plan to certain executive officers, directors and employees, among which (i) 240,000 shares of restricted
stock to Mr. Tao Li, then the CEO; (ii) 100,000 shares of restricted stock to Mr. Ken Ren, then the CFO, (iii) 40,000 shares of
restricted stock to Mr. Yizhao Zhang, 30,000 shares of restricted stock to Ms. Yiru Shi, and 20,000 shares of restricted stock
to Mr. Lianfu Liu, each of whom was then an independent director of the Company; and (iv) 1,320,000 shares of restricted stock
to key employees. The stock grants are subject to time-based vesting schedules, vesting in various installments until March 31,
2015 for then the CFO and the three independent directors, until June 30, 2015 for then the CEO and until December 31, 2016 for
the employees.

Employee
Stock Purchase Plan

On
August 9, 2012, the Board adopted the Company’s 2012 Employee Stock Purchase Plan (the “ESPP”), which became
effective as of such date. The Board adopted the Company’s Third Amended and Restated Employee Stock Purchase Plan (the
“Restated ESPP”) on May 15, 2015. The Restated ESPP reserved a total of 3,750,000 shares of Common Stock, including
1,250,000 shares of Common Stock that was increased the third time. Shareholder approval is not required with respect to the issuance
under the ESPP pursuant to Sections 303A.08 or 312.03 of the NYSE Listed Company Manuel. The ESPP has been delegated to be administered
by the Compensation Committee since October 19, 2012. Any employee of the Company or any parent (if any) and subsidiary corporation
of the Company (the “Affiliate”), who is not a natural person resident in the United States, who has been in the employ
of the Company or any Affiliate for such continuous period as required by the Board preceding the grant of rights under the ESPP
is eligible to participate in the ESPP during the applicable offering period, subject to administrative rules established by the
Compensation Committee.

56

The
ESPP is implemented by sequential offerings, the commencement and duration of which are determined by the Compensation Committee.
The purchase price at which each share of Common Stock may be acquired in an offering period upon the exercise of all or any portion
of a purchase right are established by the Compensation Committee. However, the purchase price on each purchase date shall not
be less than the fair market value of a share of Common Stock on the purchase date.

During
the fiscal year ended June 30, 2014, the Company issued 118,778 shares of common stock at the market price of $4.42 per share
to Mr. Tao Li ($525,000 in total), then the Company’s Chairman and Chief Executive Officer under the ESPP on September 26,
2013. The Company also issued 533,165 shares of common stock at the market price of $2.35 per share to certain employees enrolled
in the ESPP ($1,252,938 in total) on May 26, 2014. During the year ended June 30, 2015, the Company issued 1,362,495 shares of
common stock to its employees under the ESPP for cash of $2,946,746 and the Company issued 326,483 shares of common stock to then
its Chairman, Mr. Li, for cash proceeds of $626,847 under the ESPP.

Retirement
or Pension Benefits

Currently,
we do not provide any company sponsored retirement benefits to any employee, including the Named Executive Officers.

Deferred
Compensation

We
do not have any qualified or nonqualified deferred compensation plans.

Perquisites

Historically,
we have provided our Named Executive Officers with minimal perquisites and other personal benefits that we believe are reasonable.
We do not view perquisites as a significant component of compensation, but do believe they can be useful in attracting, motivating
and retaining the executive talent for which we compete. We believe that these additional benefits assist our Named Executive
Officers in performing their duties and provide time efficiencies for them. It is expected that our historical practices regarding
perquisites will continue and will be subject to periodic review by our Board.

The
following table sets forth information concerning cash and non-cash compensation we and/or Jinong paid to our principal executive
officer and our other most highly paid executive officer (the “named executive officers”) for services rendered in
all capacities during the noted periods. No other executive officers received total annual salary and bonus compensation more
than $100,000 during each of the three fiscal years ended June 30, 2018, 2017, and 2016.

SUMMARY
COMPENSATION TABLE

Nonqualified

Name

Non-Equity

Deferred

and

Stock

Option

Incentive Plan

Compensation

All Other

Principal

Salary

Bonus

Awards

Awards

Compensation

Earnings

Compensation

Total

Position

Year Ended

($)

($)

(1)($)

($)

($)

($)

($)

($)

Zhuoyu Li

Chief Executive

June 30, 2018

$

300,000

$

102,000

—

—

—

—

—

$

402,000

Officer, and Chairman

June 30, 2017

$

100,000

$

44,000

$

240,000

—

—

—

—

$

384,000

of the Board (2)

June 30, 2016

$

100,000

$

12,000

—

—

—

—

—

$

112,000

Yongcheng Yang

June 30, 2018

$

180,000

$

16,800

—

—

—

—

—

$

196,800

Chief Financial Officer

June 30, 2017

—

—

—

—

—

—

—

—

June 30, 2016

—

—

—

—

—

—

—

—

(1)

The amounts reported
in this column reflect the fair value on the grant date of the restricted stock awards granted to our Named Executive Officers.
These values are determined by multiplying the number of shares granted by the closing price of our common stock on the trading
day immediately preceding the grant date. The dollar amounts do not necessarily reflect the dollar amounts of compensation
realized or that may be realized by our Named Executive Officers.

(2)

Mr.
Tao Li passed away in December of 2017. Mr. Zhuoyu “Richard” Li was appointed as Chairman and Chief Executive Officer.

The
Company has not used a compensation consultant to determine or recommend the amount or form of executive or director compensation
but its management believes that its executive officer compensation package is comparable to similar businesses in our location
of operations.

58

Grants
of Plan-Based Awards

During
the year ended June 30, 2018, the Company granted no plan-based equity awards to Named Executive Officers. The following table
sets forth information regarding grants of awards to Named Executive Officers during the year ended June 30, 2018:

GRANTS
OF PLAN-BASED AWARDS

All

Other

All

Stock

Other

Grant

Awards:

Option

Date

Number

Awards:

Exercise

Fair

Estimated
Future Payouts

of

Number

or

Value

Under

Estimated
Future Payouts

Shares

of

Base

of Stock

Non-Equity
Incentive Plan

Under

of

Securities

Price
of

And

Awards

Equity
Incentive Plan Awards

Stock
or

Underlying

Option

Option

Grant

Threshold

Target

Maximum

Threshold

Target

Maximum

Units

Options

Awards

Awards

Name

Date

($)

($)

($)

(#)

(#)

($)

(#)

(#)

($
/Sh)

($)(1)

Zhuoyu Li

—

—

—

—

—

—

—

—

—

—

Yongcheng Yang

—

—

—

—

—

—

—

—

—

—

(1)

With
respect to the restricted stock awards, the grant date fair value is calculated by multiplying the number of shares granted
by the closing price on the trading day immediately preceding the grant date.

Zhuoyu
“Richard” Li. Pursuant to an Employment agreement between the Company and Zhuoyu (“Richard”) Li when
he was appointed by the Board of Directors effective May 19, 2016, Mr. Li received an annual base salary of $100,000 and a bonus
up to 40% for serving as the Company’s President. In addition, Mr. Li receives stock awards to be determined when the Company
grants the awards to directors and officers under the Company’s 2009 Equity Incentive Plan, as amended. The initial term
of the employment agreement is one year, which is automatically extended for additional one-year terms unless either party provides
written notice of termination sixty (60) days prior to the end of the prior term. On December 18, 2017, following the death of
Tao Li, the Company’s Board of Directors appointed the Company’s President, Mr. Zhuoyu Li, as its new Chairman
and CEO. For serving as the Company’s Chairman and CEO, Mr. Zhuoyu Li receives the same compensation of Mr. Tao Li.
In total, Mr. Zhuoyu Li receives an annual base salary of $300,000 with a bonus of up to 40% and stock awards under the Company’s
2009 Equity Incentive Plan.

Yongcheng
Yang. Subsequent to the periods covered by this Report, on December 19, 2017, the Company entered into an Employment
Agreement with Mr. Yongcheng Yang effective as of December 19, 2017. Pursuant to the terms of the Employment Agreement, Mr. Yang
will serve as our Chief Financial Officer for a term of one year at an annual salary of $180,000. Mr. Yang is eligible for a yearly
bonus at the discretion of our Board of Directors. The Employment Agreement will be automatically extended for additional one-year
terms unless either party provides a written notice of termination sixty (60) days prior to the end of the prior term. Either
party may terminate the Employment Agreement upon thirty (30) days written notice, or, at our discretion, we may terminate the
Employment Agreement immediately and substitute thirty (30) days salary in lieu of written notice. In the event of a breach of
the Employment Agreement by Mr. Yang, or in the event Mr. Yang is terminated for “cause” (as defined therein), the
Employment Agreement may be terminated immediately without notice and without further payments.

Description
of Plan Based Awards

The
equity incentive awards reported in the above table entitled “Grants of Plan Based Awards” were granted under, and
are subject to, the terms of our 2009 Equity Incentive Plan, as amended (the “Plan”). The Plan is administered by
the Compensation Committee. The Compensation Committee has authority to interpret the plan provisions and make all required determinations
under the Plan.

With
respect to all restricted stock grants disclosed herein, if we terminate the grantee’s employment or affiliation with us
for any reason, all unvested portions of such restricted stock grants are forfeited. Any shares of restricted stock that do not
vest for failure to meet the requisite performance targets will also be forfeited.

With
respect to all non-qualified stock option grants disclosed herein, if we terminate the grantee’s employment or affiliation
with us for any reason, all unvested options are forfeited. If the grantee’s employment or affiliation with us is terminated
voluntarily by the grantee or by us for cause, all vested options are also terminated. In the event we terminate the grantee’s
employment or affiliation with us without cause, the grantee has the lesser of ninety (90) days or the remaining term of the option
to exercise any vested options. If we terminate the grantee’s employment or affiliation with us due to death or disability,
the grantee has the lesser of twelve (12) months or the remaining term of the option to exercise any vested options. In the case
of non-qualified options subject to performance based vesting, any options which do not vest for failure to meet the requisite
performance targets will be forfeited.

60

Outstanding
Equity Awards at Fiscal Year End

The
following table provides information on all restricted stock and stock option awards held by our Named Executive Officers as of
June 30, 2017.